Regulator’s warning of ‘significant challenges’ for Europe’s bankers

EUROPE’S bank regulator yesterday warned that there remain significant challenges ahead for the continent’s lenders despite them successfully meeting new requirements to bolster their core capital buffers.

The European Banking Authority (EBA) said that 27 banks had hiked their combined capital by €94.4 billion (£74bn) to meet the expectations of the watchdog and fill a €76bn shortfall to make them strong enough to withstand the eurozone debt crisis.

EBA chairman Andrea Enria said the recapitalisation had been a “necessary and important step” but cautioned banks had a long way to go to recover from the financial crisis and comply with new global regulations.

“A lot still needs to be done. I’m very much aware this is not a silver bullet to resolve the difficult situation of the European banks,” Enria said.

The EBA’s recapitalisation plan was part of a three-pronged approach that also deals with sovereign debt exposures and improving access to funding.

“Restoring confidence in the European Union banking sector is a difficult endeavour. It’s a very complex crisis we are in and we don’t want to sound too upbeat on this,” Enria said.

“We have always said this is one component of a more comprehensive package of measures that needs to be put in place to bring stability to the European banking sector.”

News of the recapitalisation came as the Treasury select committee revealed that Jerry del Missier, the former Barclays chief operating officer and Bob Diamond’s right-hand man, will appear before MPs on Monday.