Bloomberg News

Banks’ Capital Raising Since Stress Tests Satisfies EU Regulator

May 02, 2012

European banks that took part in last year’s capital stress tests have satisfied the region’s top regulator on their progress in raising capital, the European Banking Authority said.

The regulator is “satisfied with the progress made in the fulfillment” of banks’ promises to raise core tier 1 capital, a measure of loss-bearing reserves, the EBA said in a statement on its website today. “The actions taken include capital strengthening and adequate recognition of losses,” it said.

Eight banks, out of the 90 tested, failed the European Union stress tests in July 2011 with a combined capital shortfall of 2.5 billion euros ($3.3 billion). The EBA, which is required to run the exercises annually, will postpone this year’s exams to allow banks to complete a fresh round of capital-raising.

The EBA, set up last year to harmonize banking rules across the European Union, has told banks to raise 114.7 billion euros in fresh capital by the end of June as part of measures introduced to respond to the euro area’s sovereign-debt crisis.

To contact the reporter on this story: Ben Moshinsky in London at bmoshinsky@bloomberg.net

To contact the editor responsible for this story: Anthony Aarons at aaarons@bloomberg.net


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