European Banks Rose As Stress Tests Eased Concerns Over Capital
Share prices of European banks rose, after the stress tests’ results unveiled that the region’s lenders need to raise only €3.5bn (US$4.5bn) of capital. Before the results were published, analysts estimated that the banks would have to raise €30-85bn of capital. The significantly smaller amount of capital required by European Union banks led some analysts to question the stringency of the tests. Twenty-four banks would have fallen below the 6% capital threshold had the test included losses on sovereign debt held in banking books and the combined capital required by those banks would have reached €15bn, according to some analysts. Had the Tier 1 threshold been 7%, 24 of the banks would have failed, argued others.
Tracking The World Economy... - 27/07/2010
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