Banks in Europe scrape together the extra capital they need

"This sorry news had the perverse impact of raising BBVA’s core capital by about €400 billion because it increased the losses it can set aside against tax on future profits."
Either I'm being incredibly stupid or you mean 400 million.

"Nifty accounting" has been applied too often in the past already to be of help.

The banks are in a vicious circle: nobody trusts them due to the accounting applied in the past, and everybody knows the same accounting has been used to "hide" future losses (sov govies anybody?).

So where is the "dumb" money to buy into this quagmire supposed to come from? Happy searching.......

The banks will be taken care of by the government as long as they return the favor, cheap loans in exchange for buying government debt. Kick the can down the road the people will pick up the bill at a later date.

Quote:
This sorry news had the perverse impact of raising BBVA’s core capital by about €400 billion because it increased the losses it can set aside against tax on future profits.

If adding a lump of future years before-tax profit to its balance sheet is seen to make a bank more robust, somebody can't see the wood for the trees.

www.spiegel.de/international/business/0,1518,809332,00.html

by hook or by crook in practise........

Ah! But we have the IMF gearing up. We have panicked Federal Reserve very aware of the CDS situation on Sovereigns. There will not and cannot be uncontroled defaults because that would once again create banking havoc. We will muddle until there is recognition of the engorged CDS International positions and madatorily requiring offsetting the risk. Unfortunately President Obama is clueless and Bernanke is reluctant to mandate anything other than incresing money supply and shortening the borrowing curve.