Andreas Artemis, Chairman of the Bank of Cyprus, Cyprus' largest bank said the bank disagrees with the proposal by Troika that the Central Bank of Cyprus should direct all banking groups in the island to increase the minimum Core Tier 1 capital ration
from the present 8% to 10% and to maintain this level for the duration of the adjustment programme to be agreed between the Troika and Cyprus.
The Committee of European Banking Supervisors that ran the tests said that five Spanish lender, Germany s Hypo Real Estate Holding AG and Agriculture Bank of Greece SA were the seven that fell short of maintaining the minimum 6% accepted Tier 1 capital ration
under a simulated recession and sovereign debt crisis.
Authorities determined that that 22 of the largest banks in the EU should keep a Tier 1 capital ration
"well above" 9 percent during 2009 and 2010 to withstand a worse than expected economic downturn.
Defendants knew that as a result, such would dramatically increase the Company bank division's risk weighted assets, and would decrease the Company's "risk based capital ratio" below federal banking guidelines -- rendering the Company "significantly under capitalized"; (c) because the Company's risk-based capital ration
had plummeted below acceptable levels, it had been technically subject to a Prompt Correction Action Order and thereby restricted from accepting or reviewing any brokered deposits; (d) as a result of the above, the Company's 2000 and 2001 results and projections were materially false and misleading.
Net chargeoffs (recoveries) for the first quarter of 1 substantially above the minimum capital ration
under the new buyback program.
However, large bank holding companies (those with $50 billion or more in total assets) will be required to "take affirmative steps to improve capital rations
, such as external capital raises, when those steps would be needed to meet each Basel III transition on time," Tarullo added.