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EBA satisfied with bank recapitalisation

The EU banking regulator says recapitalisation plans drawn up by European banks are sufficient to achieve new capital requirements.

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(File: AAP)

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Source: AAP


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The EU banking regulator says recapitalisation plans drawn up by European banks were sufficient to achieve new capital requirements without hurting lending to the real economy.

The London-based European Banking Authority ruled in December that the region's banks needed to raise an extra 114.7 billion euros ($A141.47 billion) in capital to restore stability and confidence in the markets.

After a "preliminary assessment" of plans presented by 30 banks, the EBA said total actions gave "a capital surplus of approximately 26 per cent" above the requirement set in December.

This leaves some margin if some of the plans fail to materialise, the authority said.

The EBA said the "measures are not viewed as having a negative impact on lending into the real economy" despite widespread fears that banks would curb lending to shore up their balance sheets.

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After taking account of the measures, the reduction of lending into the real economy "would be less than one per cent of the total amount," the EBA said.

The authority said it had not yet assessed the sustainability of the plans and that an "in-depth analysis of these will be undertaken by national authorities in close cooperation with the EBA".

The authority also said the next EU-wide stress test of the banking sector would take place in 2013.

The recapitalisation plans are among measures to restore confidence in the region's banking sector, ravaged by the eurozone sovereign debt crisis.


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