July 11 (Bloomberg) -- European banks increased their
capital reserves by 94.4 billion euros ($116 billion) by a June
deadline, the European Banking Authority said, as it seeks to
boost confidence in the region’s financial system.
Banks raised about 72 billion euros by selling shares,
holding on to profits and converting lower-quality capital to
common equity, the EBA said in a statement. The rest came from
adjusting models lenders use to measure the risk of liabilities.
“This is not the silver bullet, the situation is still
fragile,” Andrea Enria, chairman of the EBA, said in an
interview in London today. “But banks needed more capital and
we gave quite a boost with this exercise.”
The EBA told European banks in December to raise 114.7
billion euros in fresh capital. The agency required banks to
keep a core Tier-1 capital ratio of 9 percent and hold
additional reserves, called a sovereign buffer, to protect
against falling bond prices among euro-area nations.