Big EU banks lost €22bn capital on IFRS 9 switch
Italian banks saw the largest capital depletion, losing €9 billion (8.9%) of CET1 capital on the transition
The largest European Union banks saw their aggregate Common Equity Tier 1 (CET1) capital ratio fall 22 basis points on the transition to new accounting standard IFRS 9.
The 48 participants of this year’s European Banking Authority (EBA) stress tests reported CET1 capital of €1.2 trillion ($1.4 trillion) at end-2017. The restated amount, factoring in the capital effects of the switch to the new accounting methodology, which came into effect in January, was €1.18 trillion.
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