As per the report suggests, a new study by the Organization for Economic Co-operation and Development estimates that European Banks are under-capitalized, with a shortfall of about 84 billion euros. The shockingly surprising player here has turned out be the French bank Crédit Agricole, in which the under-funding amounts to 31.5 billion euros.
The second place has embarrassingly taken by Deutsche bank with a capital shortfall of 19.0 billion euros. In third place comes yet another German based bank Commerzbank with 7.7 billion capitalization.
Although it is yet not cleared whether OECD’s reports had considered the less capitalized Credit Agricole SA, or it’s more benefitted parent Credit Agricole Group – a network of retail cooperative banks, the organization has ensures to have used a different yet reliable method to calculate the shortfalls. On the other side, the French central bank has also announced to regulate the Credit Agricole Group in terms of solvency ratio.
The OECD office also provided a statement during its business hours, saying that they have been expecting the European Central Bank to come to this conclusion in their large balance examination later this year. No comments or official statements were made by both Credit Agricole and Commerzbank within or outside business hours. Meanwhile, the Deutsche Bank referred to the balance sheet data they published in mid-January.
The bank, which is to submit its report on Feb 19, had surprisingly announced a multi-billion loss in the fourth quarter – while pointing out its capital adequacy ratio had risen to 9.7 percent and also responsible for overseeing important leverage ratio (leverage ratio) lies at 3.1 percent now above the required minimum of three percent.
Commerzbank is also likely to submit its report on Feb 13.
To contact the reporter of this story: Jonathan Millet at email@example.com