According to Citigroup, European banks might have to issue 240 billion Euros yearly for three consecutive years, to finance existing and upcoming businesses.

Citigroup analysts said that the unstable bond markets have raised the question of funding for banks.

Analyst Stefan Nedialko said, "The 24 European banks, who account for 65 to 70% of the sector's assets, issued 56 billion Euros of long/medium-term funding in January but investors' macro-economic concerns are restricting their appetite for new issuance in February".

Funding availability is not a major issue for most banks, and the new stable funding ratio regulations from Basel appear difficult for only a small number of banks, Citigroup analysts said.

The Basel Committee of central bankers and financial supervisors are trying to avoid a repetition of the financial crisis and lessen the industry's instability by increasing the banks' capital.

The analysts said that the Belgian banking and insurance group KBC, Franco-Belgian financial services group, Dexia SA and Britain's largest retail banking group Lloyds Banking Group will witness the highest impact to normalized earnings and funding needs from higher funding costs and Basel III requirements.