13 banks have one week to present-by the 10th November- how they will fill a €9.5 billion capital hole. The ECB, which will on Tuesday assume sole responsibility for monitoring the stability of the 128 biggest eurozone banks, foresees new equity arriving onto bank balance sheets.
“We will have to wait and see what banks present but the future result will be institutions with more profitability,” said Nouy in the European Parliament Economic Committee.
In private, some officials from important European banks have revealed concerns about competitiveness and sector capacity to fight against new external financial operators. The ECB is aware about the extremely weak equity return that has been falling since the crisis started due to the huge deleverage. But inside the Frankfurt based-institution, officials are hopeful about a return to profitability.
Sources claim a more stable framework will make this comeback easier, mainly for shareholders. There are some pending issues to tackle, such as a pan-European Guarantee Deposits Scheme, or the evaluation of the non-performing loans. The SSM recognizes that the Banking Union is in its early stages.
“The banking union will only be complete when we have a level playing field for all financial institutions within the European Union,” Nouy concluded at the European Parliament. It seems that Ms Nouy, like her boss, Mario Draghi, is ready to tighten screws on Member States.
The next battle in the Banking Union´s long war will be to finish the Single Resolution Facility (SRF), which needs to be in place within eight years and will contain €55 billion from banking contributions. Before that, national funds will cover any shortfall in their own financial institutions.