– Adds Detail To Version Transmitted At 1459GMT
LONDON (MNI) – European Banking Authority Chairman Andrea Enria has
said that European banks have made significant progress in boosting
their capital positions since December 2011, adding that E200 billion
has now been injected into the banking system.
Europe’s banks are now in better shape to finance the real
economy, he said.
Enria’s comments come as the EBA published its final report on
its recapitalisation exercise for European banks. In December 2011 the
EBA recommended that EU banks raise their capital buffers in order to
restore stability and confidence in the markets.
“Banks are now in a better shape to finance the real economy but
must continue on the path designed by the new regulatory environment,”
he added.
The EBA also said that banks would have to continue to deleverage
their balance sheets in order to ensure the long-term stability of the
European banking system.
“A deleveraging process had already started before the capital
exercise and will need to continue in an orderly fashion to ensure
long-term repair of banks’ balance sheets,” the EBA said.
The EBA also warned that despite the positive outcome of the
recapitalisation process, the market environment remains challenging and
additional efforts by banks are also required to meet the full capital
ratio requirements under EU law and Basel III.
The EBA also said that banks’ capital strengthening has been
achieved mainly via new capital measures such as retained earnings, new
equity and liability management.
The EBA said that predictions that capital raising would lead to
reduced bank lending to the real economy had not been borne out.
–London Bureau; Tel: +442078627492; email:
wwilkes@marketnews.com/dthomas@marketnews.com
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