Resources for Basel II Capital Accord (Basel II)

Banks under pressure to raise more capital

www.financialnews-us.com

Financial institutions have been battered by the credit crisis in the past five months and the industry’s legacy will have a direct impact on bond issuance by banks next year, according to analysts.Multi-billion dollar writedowns and third-quarter losses in the banking sector will force banks to bolster their capital bases, potentially affecting subordinated and fixed-rate senior bond issuance.

Lehman Brothers credit analysts forecast in a report published last week that European subordinated capital issuance, in euros and sterling, from banks would be between €60bn ($88bn) and €65bn next year, in line with volume of the past three years. Sales of fixed-rate senior bonds from banks could be just below last year’s €150bn, they said.

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