EU Bank Help
Here are more details in what looks like a response to the European bank stress tests, “A senior French official said the 16 banks regarded to be close to the threshold would now have to seek new funds immediately. Although there has been widespread speculation that French banks are seeking more capital, none is on the list. Other European officials said discussions were still under way. The move would affect mostly mid-tier banks. Seven are Spanish, two are from Germany, Greece and Portugal, and one each from Italy, Cyprus and Slovenia. The 16 institutions that are now the focus of attention ended up with core tier one capital ratios of 5-6%. The pass mark was 5%. The EBA had given those banks until Apr ’12 to implement plans to shore up their capital buffers.” They seem now to want it done before Apr ’12.
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September 23rd, 2011 at 5:22 am
Anyone with half a brain should know the equity in these banks is already wiped out. The real problem is that the equity in many european banking majors is also likely to be wiped out as all of them need major equity injections before this is over. I am surprised none of them have done so already. Once one does, expect more issuance immediately after.
Have a look at BNPs balance sheet and plug in what happens if belgium and italy defaults. Then try to imagine what happens if this equity impairment should be even partly priced in. Stock plunges, interbank market closes, equity goes to damn near ero, and then some entity or other comes to the rescue. But if you’re a stockholder, you will be wiped out.
BNP, Soc Gen, Dexia (holding my nose now), etc etc. T-O-A-S-T.
September 23rd, 2011 at 8:10 am
define “what looks like”….
September 23rd, 2011 at 8:17 am
here let me help:
http://www.youtube.com/watch?feature=player_detailpage&v=0mj4MWZIY5Q
just replace “United States” with “Europe.” That should do it.