Financial Regulation International
2012: the year of deleveraging in Europe?
Vincent O’Sullivan, Member of the FS Regulatory Centre of Excellence at PricewaterhouseCoopers,UK. Stephen Kinsella, Lecturer in Economics at the Kemmy Business School, the University of Limerick, Ireland.
Recapitalisation plans
European leaders agreed on 27 October to strengthen the capital positions of their major banks by building up a temporary
capital buffer against sovereign debt exposures to reflect a 50% haircut in Greece sovereign debt and the market prices of
other sovereign exposures
1. In addition, banks are required to establish a buffer to ensure their Core Tier 1 capital (CT1) ratio reaches 9% by the
end of June 2012, as a measure to restore confidence in the European banking system.