Saturday, July 5, 2008
European banks need 60-90 billion euros
The US investment bank Goldman Sachs has lowered its 2008-2010 forecasts for more than 40 European banks, warning Friday that some of them may have to raise between 60 and 90 billion euros to shore up finances in the face of a nearly year-long credit crisis. Pressure on levels of capital holdings, either self-imposed or applied by regulators or ratings agencies, could force European banks to raise 60 billion euros or withhold one year of dividends, according to the study. But it added: "If in addition to regulatory tightening, the sector returns to the early 1990s level of credit losses, we estimate that the capital shortfall could amount to 90 billion euros."