To settle the matter, Zero Hedge weighed in and noted that EU banks, including Deutsche Bank, needed upwards of 500 billion euros of capital. Citing the work on EU banks by Benink and Huizinga, Zero Hedge noted
Banks are already saddled with ample unrecognised losses on their assets, estimated by many observers to be at least several hundreds of billions of euros and mirrored by low share price valuations...This whole debate highlights two important facts about our current financial crisis.
- Everyone knows that the banks are hiding losses and the extent of their hidden losses exceeds their current book capital levels.
- Banks are holding policymakers and central bankers hostage by threatening that disclosure of these losses and the related lack of capital will result in financial instability.