Financial Times
March 17, 2011
European governments must put in place emergency bank recapitalisation mechanisms within the next three months, according to the chairman of the new pan-European banking regulator.
Andrea Enria, chairman of the European Banking Authority, has told European finance ministers that he is determined that each country should be in a position to correct capital shortfalls at any banks that failed impending stress tests, whose results are due to be announced in late June.
“The backstops must be in place before the publication of the [stress test] data,” he said on Thursday. Spain, Ireland and Greece have such structures in place, as does the UK.
Germany did have a mechanism although it is being wound down. Several other countries, including Mr Enria’s native Italy, have yet to establish an appropriate body. Italy’s banks are among the weakest capitalised in Europe and analysts believe several smaller Italian institutions risk failing.
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