Bloomberg News

Bundesbank’s Dombret Says 9% Core Tier 1 for Banks ‘Feasible’

October 19, 2011

Oct. 19 (Bloomberg) -- Bundesbank board member Andreas Dombret said a 9 percent target ratio for core tier 1 capital, a measure of financial strength, is “feasible” for systemically- important European banks.

“A core tier 1 ratio for systemically-relevant banks in Europe of 9 percent after realistic mark-to-market of risks, introduced with the right sense of proportion, could be feasible and could provide reasonable comfort,” Dombret said in a speech in Berlin today.

Dombret added that banks seeking to boost their capital should first approach financial markets, and then governments. Europe’s bailout fund, known as the EFSF, should only be used as a last resort, Dombret said.

--With assistance from Nicholas Comfort and Aaron Kirchfeld in Frankfurt. Editor: Matthew Brockett

To contact the reporter on this story: Jeff Black in Frankfurt at jblack25@bloomberg.net

To contact the editor responsible for this story: Craig Stirling at cstirling1@bloomberg.net


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