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A dozen euro zone banks may need more capital: ECB

A dozen euro zone banks may need more capital: ECB© Reuters. Vice-President of the ECB de Guindos attends a news conference following the governing council’s interest rate decision at the headquarters in Frankfurt

BRUSSELS (Reuters) – A dozen euro zone banks holding about 40 percent of the sector’s assets need to strengthen their capital positions, European Central Bank Vice President Luis de Guindos said on Monday, reflecting on the results of a stress test exercise.

The ECB earlier said that it would consider a 5.5 percent common equity tier 1 capital (CET1) level as acceptable in the test but comments from de Guindos suggest that the ECB may be looking a higher level.

“Banks with core capital ratios in the adverse scenario below 9 percent display a weaker, though still satisfactory, capital position,” de Guindos told a conference in Brussels.

“These 12 entities, representing almost 40 percent of total assets of the sector, should increase robustness and enhance capital positions to face challenges ahead and will thus be closely monitored,” he added.

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Source: Investing.com

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