World Economy

$1.8b Hole in 9 Banks

$1.8b Hole  in 9 Banks $1.8b Hole  in 9 Banks

The European Central Bank found capital gaps totaling €1.74 billion ($1.87 billion) among nine lenders it tested, with the biggest hole at Portugal’s Novo Banco SA, Bloomberg reported. “Shortfalls amount to €1.74 billion resulting from common equity Tier 1 ratios falling below the threshold of 5.5% in the adverse stress-test scenario, after including impact of asset quality review,” the ECB said in a statement on its website. “Banks will be required to address remaining shortfalls in a timely manner by issuing capital instruments or undertaking other eligible measures to restore their capital positions to the required levels.” The participating banks were Banque Degroof SA, Agence Francaise de Developpement, J.P. Morgan Bank Luxembourg SA, Mediterranean Bank Plc, Sberbank Europe AG, VTB Bank (Austria) AG, UniCredit Banka Slovenija dd, Kuntarahoitus Oyj Plc, and Novo Banco. Four of the five banks at which shortfalls were identified have already covered the gaps by measures including capital raising, the ECB said. They were AFD, Mediterranean Bank, Sberbank and VTB.