TALLINN May 20 Estonia's central bank said on
Tuesday it would raise the minimum capital requirement for the
eurozone country's banks to 12.5 percent on August 1 to cover
systemic risks in the small open economy.
The central bank said in October last year it would add 2
percentage points to the European Central Bank's (ECB) minimum
capital requirement of 8 percent, and an additional 2.5
percentage points in line with ECB rules for capital
conservation buffers .
"Estonia's small, open economy poses a systemic risk for
banks due to external factors such as a sudden worsening of the
economic situation, which could quickly lead to loan servicing
problems in the private sector and a worsening of bank
finances," Ardo Hansson, Estonia's central bank governor said in
Estonia's banking sector is 95 percent controlled by large
Nordic banking groups, such Swedbank, SEB,
Danske and Nordea.
(Reporting by David Mardiste, editing by Louise Heavens)