ECB Announces Capital Increase Of E5 Billion to E10.76 Bln
Baku, December 17 (AZERTAC). As was widely expected, the European Central Bank today announced that it has decided to increase its subscribed capital by E5 billion to E10.76 billion over the next three years.
It said the decision was "deemed appropriate" given an increase of volatility in foreign exchange markets, interest rates and gold, as well
The national central banks of Eurozone countries, which are required to pay in 100% of their capital subscription shares, will do so in three instalments -- the first one on December 29 of this year, the next at the end of 2011, and the third at the end of 2012.
The bank noted that the capital paid in as a result of the increase will allow the ECB to boost its provision against potential losses by the amount of the increase.
National central banks in the non-Eurozone EU countries, which also share in the ECB`s capital, will be required to pay in a minimum of 3.75% of their subscribed share, down from 7%. That means the non-euro central banks will have only "minor" adjustments to their capital share in the ECB, the bank noted.
The ECB said the capital increase, the first in twelve years, was also appropriate given how much larger the financial system in Europe has grown since then.
The central bank said the capital increase decision resulted from an assessment of capital adequacy conducted in 2009.
Other news in this section
