By hook or by crook

摘要

The idea of getting Europe's banks to plump up their cushions of capital to help restore confidence seemed sensible enough last year when it was championed by the imf and then adopted by the European Banking Authority (eba). But the journey to higher capital levels matters as well as the final destination. If banks with big shortfalls (see chart) simply slim their balance-sheets, that could hurt the flow of credit. It is better for Europe's economies, if not for bank shareholders, if lenders raise the cash from investors. So the difficulties that have beset UniCredit, Italy's biggest bank by assets, as it tries to plug a gap of €8 billion ($10.2 billion) are particularly ominous. UniCredit's shares slumped by almost half after it approved a deeply discounted rights issue earlier this month, though they have recovered a tad since.