"The opposite is the case. The arbitrarily set requirement to hold 9 per cent core Tier 1 capital while at the same time taking account of the risks arising from European government bonds is very difficult to understand. The lengthy and chaotic-seeming process has, in addition, strengthened the impression that any result is possible", continued Kemmer.
The markets had been highly unsettled by the EBA, Kemmer went on to say. The results would tend to have a procyclical effect, thus increasing tension in the financial markets. "Adverse consequences - including for the growth of European economies - cannot be ruled out", Kemmer fears. He said German banks had built up massive amounts of capital in recent years and were anything but undercapitalised.
Press release
© BDB - Bundesverband Deutscher Banken
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