European capital enhancement exercise

In light of the increase in systemic risk triggered by the sovereign debt crisis in the euro area it was decided, in the context of the European Council of 26 October 2011, that banking groups subject to the European Banking Authority’s (EBA) stress test exercise are required to strengthen their capital positions in order to reach a Core Tier 1 capital ratio of 9% by 30 June 2012 following a prudent assessment of their sovereign debt exposures at market prices as at 30 September 2011.

This decision aims to build up a temporary capital buffer and consequently to strengthen the soundness of institutions amid the current uncertainty associated with the sovereign debt crisis.