Vice-president of the European Central Bank, Lucas Papademos, has announced that there will most likely be large write-downs from euro area banks on their securities and loans from 2007 to 2010. The figure could amount to GBP394 billion.

Potential losses between the euro area banks are expected to amount to GBP172 billion by the end of 2010. However, retained earnings and provisions over the next couple of years could help ease the pain for the banking sector.

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