EBRD discussing raising capital

PanARMENIAN.Net - The European Bank for Reconstruction and Development's board of governors is willing to discuss raising capital.



The former communist countries in Europe and central Asia that the London-based EBRD invests in are struggling through the deepest recession since shaking off communist regimes. The financial crisis that left banks with more than $2 trillion in losses worldwide has led to a dearth of credit and investment in the region.



EBRD President Thomas Mirow called on governors to start addressing the bank's capital needs as part of talks on its medium-term strategy for the period between 2011 and 2015. The board should reach a decision when the bank holds its next annual meeting in Zagreb a year from now, he said.



"There have been, as I had hoped for, some preliminary debates about what is the sustainable business volume for this bank, how do we cope with risks, and what should this mean in terms of a possible capital increase," Mirow told reporters today.



"In this field, we didn't have all shareholders on the same line" with some preferring to stay within the existing capital limits, he said, adding that "there was no divisive debate."



Quizzed about the capital requirements of the EBRD, Mirow replied that the bank could invest between 7.0-8.0 billion euros (9.4-10.8 billion dollars) both this year and next year.



The EBRD, which has a capital base of 20 billion euros, will decide whether to alter its capital levels at the bank's next annual meeting in Zagreb, Croatia, on May 14-15, 2010.