EU banks may need 276b euros of loss-absorbing funds

London

EUROPEAN Union banks need to sell hundreds of billions of euros in loss-absorbing liabilities over the next few years to meet the bloc's rules designed to prevent public bailouts.

The European Banking Authority (EBA) estimates as much as 276 billion euros (S$397 billion) of financing is needed under the most stringent assumptions, lowering its earlier forecast. While this will increase funding costs for banks and may result in more expensive credit, the measure will help to stave off crises even more damaging to the broader economy, the regulator said in an impact study on the EU's bank-failure rules.