Core capital cloud on horizon for southern European banks

April 7, 2015 4:32 PM

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LONDON, April 7 (IFR) - The European Commission is considering an investigation into the way some southern European countries treat deferred tax assets (DTAs), which could end up hitting the capital ratios of banks from those jurisdictions.

The possible probe stems from concerns that some peripheral governments are creating an uneven playing field by guaranteeing DTAs because they allow domestic banks to include those assets in their core capital ratios.

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