“A coordinated European solution to the major problem of the sovereign debt uncertainty is the only way out of the current crisis of confidence”, said Guido Ravoet, Chief Executive of the EBF. “But we do not see the proposed recapitalisation of European banks as central to the solution.”
The EBF stresses that European banks have continued to place trust in sovereign debt and made credit available to national governments throughout the crisis. At the same time, they have worked on rebuilding their banking books and steadily increasing their capital levels. In doing so, they were anticipating the tougher rules that will come from the implementation of Basel III in the European Union.
The EBF is, however, deeply concerned by the Commission’s proposal to bring forward to 2012 the capital levels originally agreed by Basel III for 2015. Banks will continue to take the necessary steps to build up more reserves but it may not be easy where they have to find those additional funds on the open market in the current climate of decreasing profitability, with a threat of restricting disbursements to investors and the absence of a clear path from governments.
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© EBF
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