Will the European banking capital hole really be filled?

Ben Chu

Finally we’ve got some hard numbers from the Europeans on the hole in the banking sector. This has been posted on the European Banking Authority website, showing how much the banking sector of each country will need to raise by next June:

 Will the European banking capital hole really be filled?

So according to the EBA, French banks need to raise 8.8bn euros to reach a 9 per capital ratio. German banks need 5.2bn euros. It’s 26bn euros for the Spanish banks. Italian banks need 14.8bn euros. The combined total is 106bn euros.

Those figures are very low compared to the estimates of others of the size of the euro bank capital hole. The IMF put the size of the hole at 200bn. And here’s the estimates from the analysts at Societe Generale by country:

sg banks Will the European banking capital hole really be filled?

It’s not hard to spot some major differences, particularly on France, Germany and Italy (although Spain seems to have to raise more than expected). Now we wait to see if the capital markets are impressed with the EBA’s calculations. The crucial question is whether the banks’ cost of short-term borrowing goes down.

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  • Firozali A.Mulla

    Ben,Prime Minister David Cameron on Saturday reminded G20 leaders they must do everything in their power to remove obstacles to world growth and avoid slipping back into protectionism.G20 nations, which represent 85 percent of the global economy, meet in France on November 3 and 4 and have pledged to come up with concrete steps to boost growth as the world economy skids. Cameron, in Perth for a Commonwealth leaders summit, held talks with his Australian counterpart Julia Gillard Saturday and said both of them agreed on the urgency in tackling imbalances in the world economy.”On the G20 agenda, we both agree we’ve got to remove the obstacles to world growth, whether that is a deal in the eurozone, whether it is making sure there is no slide back into protection, whether it’s dealing with the imbalances,” he told reporters. I have heard this many times however, I must state that no one has come up with the real solutions. I thank you Firozali A.Mulla DBA

  • Firozali A.Mulla

    Ben, not all of the British were against the idea of American independence
    in 1776 – especially those who favored the end of the British monarchy. And not
    all of the British were against Napoleon when he came to power in the 1790s – even
    though he invaded much of Europe and fought Britain in a war that ended only at
    the Battle of Waterloo. In fact, in the early days of Napoleon’s reign, some of
    the British considered Napoleon to be “the French George Washington”:”E.Tangye Lean’s book The Napoleonists describes in absorbing detail the way politicians of the [British] Whig opposition and the leading writers and journalists of the period created an image of Napoleon as a man of destiny, the agent of progressive change in the world. He was pre­sented as everything that the reactionary [British] Tories were not. Those in the habit of excusing and praising Napoleon took such pride in renouncing patriotism that they were perceived as agents of a mortal enemy,indeed traitors. Lord Holland might have been a Whig prime minister. He considered Napoleon ‘the greatest statesman and the ablest general of ancient or modern times. “Charles James Fox, Lord Holland’s uncle, was as quick to excuse and flatter Napoleon as he had been to hail the French Revolution. Here was the George Washington of France, a moderate man as well. In no circumstances would Napoleon seize power by force, and when he did so, Fox whitewashed it as the kind of reorganization of the state that military men are apt to go in for. Napoleon had made good the past, Fox told Lord Holland, he had ‘thrown a splendour even over the violence of the Revolution .’After the 1803 Treaty of Amiens [under which the war ceased and Britain recognized the new French Republic], Fox declared, “the Triumph of the French government over the English does in fact afford me a degree of pleasure which it is very difficult to disguise.’ “1814 was the crucial year whose series of battles forced Napoleon to abdicate. Already notorious, [the famous poet Lord] Byron was a foremost spokesman for those who glorified Napoleon as a superman redesigning the world on progressive lines. That January he told his long-suffering publisher John Murray that Napoleon ‘has my best wishes to manure the fields of France with an invading army,’ a jaunty way of expressing his con­tempt for British purposes and British soldiers. Next month, he was writing, ‘Napoleon! This week will decide his fate. All seems against him;
    but I believe and hope he will win.’ That April, Paris capitu­lated. ‘I mark this
    day!’ Byron commented on hearing the news, ‘I am utterly bewildered and confounded.’
    Immediately, in a matter of hours and in a spirit of distress at events, he wrote
    the ten stanzas of his ‘Ode to Napoleon Bonaparte.’ “Exile to the island of Elba seemed to Napoleon’s admirers an ending too inglori­ous to be tolerated. Whig politicians, Lord John Russell among them, visited Elba to pay their respects as though to an Emperor in a minia­ture court. Napoleon’s escape from captivity thrilled them. Byron exulted, ‘It is impossible not to be dazzled and overwhelmed by his character and career.’ ” I thank you Firozali A.Mulla DBA

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