Banks thus planned to meet their shortfalls predominantly through capital measures, and some made progress in spite of unfavourable market conditions. Low share prices, as at present, cause a strong dilution effect, drawing resistance from incumbent shareholders and management. 4 The experience of UniCredit, whose deeply discounted € billion rights issue led to a 45% (albeit transient) plunge in its share price, deterred other banks from following suit. Capital can also be built through retained earnings, debt-to- equity conversion or redemption below par. Some banks opted to convert outstanding bonds, notably Santander for € billion. Overall, banks plan to rely substantially.
