Bloomberg News

Some EU Banks May Need 9% Capital Buffer, EU Official Says

October 13, 2011

(Updates with comment from official in fourth paragraph. (See EXT4 for more on the sovereign debt crisis.)

Oct. 13 (Bloomberg) -- Some banks in Europe may be required to maintain a 9 percent capital buffer to address sovereign risks, a European Union official said.

That is one of the figures the European Banking Authority is working on as part of an assessment of which lenders need a temporary buffer of extra capital, the EU official told reporters today in Brussels on the condition of anonymity.

The EU plans a coordinated recapitalization of banks to stem the sovereign-debt crisis. Under the plans, systemic banks would first seek market finance, then tap national governments if private funding fails and, finally, fall back on the euro- area rescue fund if necessary.

A possible timetable for any recapitalization is three months to six months, the official said.

--Editor: Patrick G. Henry

To contact the reporter on this story: Jonathan Stearns in Brussels at jstearns2@bloomberg.net

To contact the editor responsible for this story: James Hertling at jhertling@bloomberg.net


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