EU bank recapitalization figures to be published ahead of summit

Dec 7, 2011, 17:50 GMT

Brussels/London - The European Union's banking watchdog will on Thursday indicate how much additional capital the bloc's banks need to shield themselves from the eurozone's sovereign debt crisis, it announced in a statement on Wednesday.

The decision will come ahead of a crucial summit on Thursday in Brussels, where EU leaders will try to find a lasting solutions to the debt crisis.

The European Banking Authority (EBA) will publish the formal recommendation and the final aggregate results of the recapitalisation exercise at 6 pm (1700 GMT), one and a half hours before the start of the two-day summit in Brussels.

EU leaders agreed in October that banks should temporarily hold on to more capital to compensate for the loss in value of government bonds of troubled eurozone states.

Estimates have put the value of this recapitalization plan at 108 billion euros (144.5 billion dollars). The EBA is due to update the figure to take into account the devaluation of bonds as of September 30, which was chosen as the reference date.

The London-based body is also expected to detail how much extra cash banks in each country will need to meet the recapitalization targets by a deadline that expires at the end of June, 2012.