6 - External financing of euro-area non-financial corporations (net issuance; annual growth rates) 40  40  35  Total external financing  Bank loans  Quoted shares  Debt securities  35  30  30  25  25  20  20  15  15  10  10  5  5  0 1999  0 2000  2001  2002  2003  2004  2005  2006  Source:ECB.
The practical effect of the two-level approach is that banks under stress may let their common equity ratio drop below the 7% level that is the sum of the minimum and buffer requirements. However, restrictions on capital distributions will result, which will become progressively more stringent as the common equity ratio drops closer to the 4.5% minimum.