Lenders require hard equity of 50 bln eur by 2018 -Buba
* Capital needs centre mainly on the country's big banks
* Can meet Basel III targets largely via retained profits
Germany's Bundesbank believes the country's banks require about 50 billion euros ($72 billion) in additional capital to fulfil new regulatory guidelines, the central bank's vice-president said on Thursday.
"Right after the publishing of the final rules in December of last year, we started a two-stage oversight process and are accompanying the institutions in their capital plans," Franz-Christoph Zeitler said in a speech.
"A rough, preliminary estimate shows capital needs of roughly 50 billion euros, that is for the most part concentrated on large banks that actively trade," he said.
The Bundesbank had conducted a simulation that showed German banks could by 2018 largely strengthen their Core Tier 1 equity, the highest quality capital that can be used to absorb losses, to meet Basel III guidelines mostly by retaining earnings.
Because German companies only need to finance about 30 percent externally, the Bundesbank expects a negligible impact on growth. Those small and mid-sized companies who are largely unable to tap capital markets can borrow from local savings and mutual banks.
These lenders, which employ very conservative business models, are estimated to only have a minor need to raise fresh capital, according to the Bundesbank.
Reuters had reported in September that a Bundesbank study showed all German banks taken together would need around 90 billion euros in extra capital to meet the Basel targets by 2019, whether through retained earnings or capital raising. (Reporting by Christiaan Hetzner; Editing by Will Waterman) ($1=.6907 Euro)
www.reuters.com
* Capital needs centre mainly on the country's big banks
* Can meet Basel III targets largely via retained profits
Germany's Bundesbank believes the country's banks require about 50 billion euros ($72 billion) in additional capital to fulfil new regulatory guidelines, the central bank's vice-president said on Thursday.
"Right after the publishing of the final rules in December of last year, we started a two-stage oversight process and are accompanying the institutions in their capital plans," Franz-Christoph Zeitler said in a speech.
"A rough, preliminary estimate shows capital needs of roughly 50 billion euros, that is for the most part concentrated on large banks that actively trade," he said.
The Bundesbank had conducted a simulation that showed German banks could by 2018 largely strengthen their Core Tier 1 equity, the highest quality capital that can be used to absorb losses, to meet Basel III guidelines mostly by retaining earnings.
Because German companies only need to finance about 30 percent externally, the Bundesbank expects a negligible impact on growth. Those small and mid-sized companies who are largely unable to tap capital markets can borrow from local savings and mutual banks.
These lenders, which employ very conservative business models, are estimated to only have a minor need to raise fresh capital, according to the Bundesbank.
Reuters had reported in September that a Bundesbank study showed all German banks taken together would need around 90 billion euros in extra capital to meet the Basel targets by 2019, whether through retained earnings or capital raising. (Reporting by Christiaan Hetzner; Editing by Will Waterman) ($1=.6907 Euro)
www.reuters.com
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