By Laura Noonan
LONDON, Nov 28 (Reuters) - Pressure from the EuropeanCentral Bank (ECB) and national regulators will leave Europe'sbanks with a 280 billion euro ($380 billion) capital hole tofill in 2014, accountants PwC said in a reportpublished on Thursday.
Banks in the eurozone will have their books scrutinised bythe ECB next year, a process that could reveal capital shortagesif banks are found not to have set aside enough to cope with badloans.
Elsewhere in Europe, regulators are enforcing tough newnational standards, including Switzerland's and Britain's recentefforts to set a "leverage ratio" that forces banks to holdhigh-quality equity equal to a set percentage of their totalassets.
"European banks are facing another turbulent couple ofyears," said Miles Kennedy, financial services partner at PwC."For banks outside the scope of the ECB, the challenges are noless intense."
Banks such as Deutsche Bank and Barclays have already raised billions in extra capital but the PwCfindings underscore market expectations of more to come.
PWC said banks could make up some of the gap throughself-help measures, such as selling assets, but that most of thehole would be filled by raising about 180 billion euros of newequity.
"Although regulators will likely give banks some breathingspace to execute their plans, the markets will apply more urgentpressure," said Kennedy.
"We expect 2014 to mark a big shift of emphasis, fromde-leverage on the asset side - disposal and de-risking ofassets - to de-leverage on the liability side - capital raisingand restructuring."
The ECB review, which comes before the central bank takesover as the eurozone's financial supervisor in late 2014, isbilled as the toughest assessment banks have ever faced and isdesigned to banish lingering investor fears about their health.
Barclays (BARC)
