PWC Warns European Banks About Cash Crunch in 2014

European banks will face a “substantial capital crunch” in 2014 thanks to new industry regulations, with capital shortfalls expected to be in the region of 280 billion euros ($380 billion), according to PricewaterhouseCoopers (PwC).

In a report labelled “De-leverage take 2,” PwC said banks’ capital reserves will face three pressures next year: the Basel III capital ratio requirements, leverage ratio requirements, and the European Central Bank’s (ECB’s) recent Comprehensive Assessment.

The company also warned that these challenges will be compounded by further regulation from individual countries. Unable to make up the capital shortfall by the traditional methods, banks will have to raise 180 billion euros ($244 billion) in new equity, PwC added.

via CNBC/a>

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Alfonso Esparza

Alfonso Esparza

Senior Currency Analyst at Market Pulse
Alfonso Esparza specializes in macro forex strategies for North American and major currency pairs. Upon joining OANDA in 2007, Alfonso Esparza established the MarketPulseFX blog and he has since written extensively about central banks and global economic and political trends. Alfonso has also worked as a professional currency trader focused on North America and emerging markets. He has been published by The MarketWatch, Reuters, the Wall Street Journal and The Globe and Mail, and he also appears regularly as a guest commentator on networks including Bloomberg and BNN. He holds a finance degree from the Monterrey Institute of Technology and Higher Education (ITESM) and an MBA with a specialization on financial engineering and marketing from the University of Toronto.
Alfonso Esparza