Europe Announces "Plan" For Banks: Only $150B and 9% Reserves, But May So By Reducing Lending

After all the talks coming from Europe it's hardto tell what is meaningful. Today European leaders announced that they "had agreed on plans to shore up the region’s banking system". Banks will have to raise "perhaps" $150B in new capital as a buffer against possible losses on their holdings of European government bonds that have declined in value.

Bloomberg reports however, that the smaller group of 17 European nations that use the euro continue talks in Brussels over how to deal with Greece qnd how to use the limited resources of the bailout fund.

In other words, what nobody is exactly what did they agree to.
"Along with increasing bank capital, the plan calls for a new effort by governments to ensure that banks have the funds they need to operate. European banks rely heavily on short-term loans to conduct their business and the vulnerability of that funding played a role in the recent collapse of the French-Belgian Dexia bank".

Woud this small extra capital have saved Dexia?
The new plan asks the European Central Bank, the European Investment Bank and other agencies to “urgently explore” a guarantee system so that banks could wean themselves from short-term loans, which often must be renewed weekly or even daily.

So they announce a plan that asks "to explore"!?

Banks would have to set aside capital equal to 9% of their assets, an increase from the ridiculously low 5% level used as a standard by the European Banking Authority.
Immediate concerns were raised about achieving the 9% by decreasing total assets, i.e. reducing how much money they loan to businesses, consumers and governments. That would not help economic growth at all.

"To head off this prospect, the bank capital plan calls for heightened oversight by regulators to ensure that banks don’t achieve the new targets by selling off assets or restricting new loans. Regulators “must ensure that banks’ plans to strengthen capital do not lead to excessive deleveraging, including maintaining the credit flow to the real economy,” . Right...