Just under half of the funds used to rebuild their capital base came from government intervention. Looking ahead, banks’ capital requirements must be met by reactivating the market. This depends on the total transparency of banking assets.
The cloud of uncertainty that continues to hang over banks’ balance sheets limits the inflow of private capital, increases the level of capital ratios demanded by the market and makes the incentives to reduce assets more stringent. Action must be taken to re-establish the certainty and credibility of the asset side of bank balance sheets.