As a part of European measures to restore confidence in financial markets, the European Banking Authority (EBA) has published a plan for the recapitalisation of European banks based on new, higher requirements.
In light of the substantially increased systemic risk, banks will be required to have a minimum of 9% Core Tier 1 capital by the end of June 2012. In addition, capital reserves must be established that make full allowance for possible losses on government exposures at current market prices.
"Norwegian banks will not face problems meeting this capital requirement," says Finanstilsynet's Director General, Morten Baltzersen.
DnB NOR has participated in the capital needs survey. The bank has no exposure to the debt-burdened states in Europe. The DnB Group can redeploy capital from its holding company to the banking group to ensure that the bank meets the capital need assessed by the EBA.
The capital needs that have been made public are provisional. They are based on accounting data and government exposures as of June, adjusted for market prices of government securities as of September. The final capital needs for individual banks will be clear at around mid-November once banks have published their third quarter figures.
Banks will be required to draw up plans for achieving the stipulated capital level, including any fresh capital to be raised. The plans will be subject to supervisors' approval.
- EBA's press release: "The EBA details the EU measures to restore confidence in the banking sector"
- DnB NOR's announcement: "DnB NOR passes EBA's sovereign exposure buffer requirements"