EU banks must drop €3.2T in assets for Basel III


EU banks will need to reduce their balance sheets by €3.2T and raise nearly €50B in capital over the next five years in order to comply with Basel III, FT says, citing an RBS study.

The banks flagged as the "most in need of fresh capital" are Barclays (BCS), Crédit Agricole (CRARY.PK), and — not surprisingly — Deutsche Bank (DB).

Smaller banks will need to cut €2.6T in assets, a prospect which suggests lending to small businesses could dry up.

More: Deutsche to shed assets, FDIC vice chair says bank is undercapitalized.

Even more: Barclays to bridge capital shortfall with rights issue, CoCos.

From other sites
Comments (8)
  • Seth Walters
    , contributor
    Comments (675) | Send Message
     
    Sounds like one heck of a lot of selling pressure in all liquid assets to me. 3.2T euro is about what, 5T USD? That's even bigger in scope than all of Ben's QE....
    11 Aug 2013, 01:16 PM Reply Like
  • wyostocks
    , contributor
    Comments (9111) | Send Message
     
    Just let the Ponzi scheme go on forever and all will be just fine. History will never repeat itself because this time is different.
    11 Aug 2013, 02:30 PM Reply Like
  • Ajayyy
    , contributor
    Comments (325) | Send Message
     
    5Y is so far. Almost as far as the 2008 lows.
    If there is one thing that markets keep telling us it is to forget the future (and the past). Lets worry about now and it will be alright. Let's keep printing money and living in the moment. This is nirvana.
    11 Aug 2013, 02:40 PM Reply Like
  • Deja Vu
    , contributor
    Comments (1777) | Send Message
     
    Let me explain what is wrong with banks, US and European. When ordinary companies came recruiting at the Harper Center at the University of Chicago, you wouldn't know it. They parked their rented cars in the underground garage.

     

    Whenever any bank came recruiting, the streets around the school would be lined with, (I am not joking), stretch limos. You could tell from a mile off from seeing the limos with their drivers, all illegally parked, that the bankers were in town.

     

    The bankers were the only people recruiting who would take their candidates to the most expensive restaurants and night clubs in Chicago.

     

    Not one single company, not Apple, not P&G, not GE, but every single bank no matter how broke still behaved like visiting royalty. Clearly the bankers have never got what they have done wrong and never will so long as the political class enables them to be backstopped by the ordinary folks who pay taxes to support the i-bank gambling addiction.
    11 Aug 2013, 03:20 PM Reply Like
  • WisPokerGuy
    , contributor
    Comments (1293) | Send Message
     
    I've been basically waiting for this news for the last 2-3 years since this is a major buying opportunity for banks like Citi and JP Morgan that have European exposure. The European banks will need to liquate assets at a discount because the total value of liquation is so great the selling value will outweigh the buying capability. Therefore, banks such as Citi and JPM, which are very well funded, and can step into these purchases with wallets open. This will be a major revenue generator for C and JPM in the future. I assume you will also start seeing major hedge funds jump into this pool fairly quickly. This isn't any kind of surprise. This is basically "Capitalism 101". Buy assets at a deep value and reap the profits.

     

    Long Citi and JP Morgan Chase.
    11 Aug 2013, 04:48 PM Reply Like
  • stoj
    , contributor
    Comments (718) | Send Message
     
    long US banks, on the relative stubbornness ( and austerity ) of other zones
    11 Aug 2013, 09:20 PM Reply Like
  • minecanary
    , contributor
    Comments (1125) | Send Message
     
    You guys don't get it. The Tidy Bowl world of corrupt bankers is starting to flush. JPM, Deutsche and the others are so big and connected it will take some plunger work to clear the pipes but it's coming...like the morning after a wing contest. Get your metals quick.
    11 Aug 2013, 11:11 PM Reply Like
  • sethmcs
    , contributor
    Comments (3519) | Send Message
     
    If the banks can't do it they will just change the rules.
    12 Aug 2013, 12:02 AM Reply Like
DJIA (DIA) S&P 500 (SPY)
ETF Hub
ETF Screener: Search and filter by asset class, strategy, theme, performance, yield, and much more
ETF Performance: View ETF performance across key asset classes and investing themes
ETF Investing Guide: Learn how to build and manage a well-diversified, low cost ETF portfolio
ETF Selector: An explanation of how to select and use ETFs