Published by the EBA just before the crisis EU summit, the new estimate of fresh capital required by mid-2012 also increases the total figure for European banks, from EUR 106.4bn to EUR 114.7bn.

The revised report by the EBA, which believes such a capital boost would allow banks to increase their Tier 1 capital ratio to 9%, comes after the euro debt crisis spread to some of the eurozone's core countries and the closely intertwined European banking system came under additional pressure.

Greek and Spanish banks still have the largest demand for capital with EUR 30bn and 26.2bn respectively. The estimate for German banks has increased from EUR 5.18bn to EUR 13.1bn and for Italy's from EUR 14.77bn to EUR 15.4bn.

The EBA's estimates are based on the market value of investments in sovereign bonds of euro countries as on 30 September 2011, so that potential later sales of the bonds and a reduction in exposure to vulnerable members does not affect the recommendation for recapitalisation.

Slovenia's central bank has responded to the recommendation by saying that NLB would have to submit by 20 January a detailed action plan on how it intended to secure the required Tier 1 capital ratio.

The bank's measures (including recapitalisation and divestment) should restore the trust of market participants, facilitate the bank's access to financing and in this way enable it to finance the economy.

NLB chairman Bozo Jasovic says that NLB needs EUR 400m in fresh capital. Unless the capital is secured by the key owners, the bank plans to seek it on the market, he has repeatedly said.

NLB shareholders authorised the management for recapitalisation in late October, but it is unclear when it will happen as the biggest owners - the state and the Belgian KBC bank - have not yet reached agreement.

A decision on how the needed capital will be raised will have to be taken by the new government, but in line with EU leaders' agreement banks should first try to secure private funding, while the states can intervene if that is not possible. Recapitalisation from euro stability mechanisms is only possible as the last resort.

The other Slovenian bank bound by the EBA's recommendations, NKBM, meets the required Tier 1 capital adequacy ratio of 9% as on 30 September, Banka Slovenije said.