Europe’s Banks Head to Asia Amid $1 Trillion Capital Shortfall
ByEuropean banks are heading to Asia for capital as new rules at home demand they sell more than $1 trillion of equity and subordinated debt to increase loss buffers.
French and German lenders have sold the equivalent of $1.8 billion in notes that act as a cushion in case of insolvency this year, in denominations from the Chinese yuan to the Japanese yen. Before this year, they’d issued none. Dutch and Italian banks that began issuing in the region in 2012 have also stepped up activity.
Financial institutions are turning to Asia, where there’s ample cash to buy large amounts of securities and pricing is attractive, after money managers in Europe gorged on about $266 billion of subordinated debt in either dollars or euros since 2008. The move East is poised to accelerate as banks still need to issue about four times that amount…
Europe’s Banks Head to Asia Amid $1 Trillion Capital Shortfall
