“The European Banking Authority measures are a great mistake that may cause a credit crunch and hurt the economy,” Mussari told reporters in Rome. “We will use all instruments available under the Italian and European law to oppose them,” he said. ABI, as the association is known, said in a Dec. 9 statement that it might consider legal actions against EBA over the capital-raising measures.
EBA said on Dec. 9 that European Union banks must raise 114.7 billion euros ($153 billion) in new capital to withstand writedowns caused by the area’s sovereign-debt crisis. Italy’s top five lenders have to boost capital by 15.4 billion euros, up from the 14.8 billion euros estimated in the previous round of stress tests in October.
UniCredit SpA (UCG), Italy’s biggest bank, will need 8 billion euros in additional capital, the second most among European banks after Banco Santander SA (SAN), and up from 7.4 billion euros previously estimated in October, the EBA said. Banca Monte dei Paschi di Siena SpA (BMPS)’s shortfall rose to 3.3 billion euros from 3.1 billion euros.
“Our initiative is to protect the national interest, not the banks’ interests,” Mussari said.
Italian lenders are facing higher costs of funding as contagion from the sovereign debt crisis spread to Italy last month, pushing the yield on the country’s 10-year bond above the 7 percent threshold that led Greece, Ireland and Portugal to seek bailouts.
Unione di Banche Italiane ScpA (UBI) needs 1.4 billion euros and Banco Popolare SC (BP) 2.7 billion euros, according to the EBA. For both lenders the authority requested about 100 million less than estimated in October.
Intesa Sanpaolo SpA (ISP), the country’s No. 2 bank, is the only Italian bank under review that doesn’t need additional capital, the regulator said.
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