November 15, 2011 / 12:11 PM / 7 years ago

EBA to detail bank capital hole, CoCo criteria-sources

LONDON, Nov 15 (Reuters) - Europe’s weaker banks expect to be told the precise amount of capital each needs to raise to repair their balance sheets on Friday and be given the definition of the hybrid capital they can use to fill the gap, people familiar with the matter said.

The European Banking Authority (EBA) last month said banks needed to raise 106 billion euros ($144.5 million) to restore confidence in the industry, but said a final figure for each bank would be given in November. Those details are due on Friday, three banking industry sources said on Tuesday.

The EBA declined to comment on precise timing.

The regulator is expected to give details on “contingent capital” instruments, dubbed “CoCos”, that banks can use to fill any shortfall at the same time, two sources said.

Contingent capital — such as debt that converts into equity when a bank hits trouble — will be accepted if it meets strict criteria, the EBA said last month. It is expected to issue a common European “term sheet” to make clear that criteria, such as the trigger point when the instrument converts into core capital. ($1 = 0.734 Euros)

Reporting by Steve Slater and Philipp Halstrick; Editing by Hans-Juergen Peters

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