EU Banks Told to Boost Capital Cushion

Europe's banks must increase their capital by 114.7 billion euros, more than predicted two months ago, to make them strong enough to withstand the euro zone debt crisis and restore investor confidence, Europe's banking watchdog said on Thursday. Confirming an earlier Reuters story, the European Banking Authority (EBA) said the capital shortfall across 71 banks was almost 8 percent higher than the 106.4 billion euros ($142 billion) estimated in October due to increases for banks in Germany, Italy, Austria and Belgium. Banks will look to fill any shortfall by raising cash from rights issues, shrinking loans to customers, selling assets or cutting dividends or pay for staff. National governments may have to bail out any lender unable to find the cash.

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