Leading European banks are broadly on track for boosting their capital base to cushion against crises and the total funds raised exceed the target, the EBA oversight body said on Wednesday. Action to strengthen the banks had focused mainly on raising capital but also on reducing holdings of risky assets, and the measures had not crimped bank lending the European Banking Authority said. \"The measures initially identified have been implemented as planned,\" it said. \"The vast majority of the banks in the sample meet the required ratio of nine percent core tier one (capital).\" Although the climate \"remains very challenging, the recapitalisation has contributed to strengthening the capital base of the banking system and put banks in a stronger position to continue lending to the real economy.\" EBA head Andrea Enria said that work to strengthen the capital base was going to plan and this should \"support lending to the real economy and gradually restore banks\' access to market funding.\" The report said: \"The process of balance sheet repair is, however, on-going.\" The EBA had reported in December 2011 at a particularly critical point in the eurozone crisis, that 27 banks had a total shortfall of 76 billion euros ($93.3 billion) in meeting a new requirement that top quality capital amount to 9.0 percent of weighted risks being carried. These banks had to meet the new target by the end of June this year. The EBA, the EU body responsible for certain aspects of banking activity, initially surveyed 71 banks in the European Economic Area. It found that 37 banks had a total shortfall of 115 billion euros. But three of these had to undergo major restructuring and a fourth, Spanish Bankia, has since had to be restructured, and six were covered by a programme for restructuring Greek banks. The latest data submitted by banks showed that they \"are generally on track to comply with the EBA recommendation,\" the EBA said. But it noted that seven of the 27 banks were \"relying on government backstop measures to reach the 9.0-percent level.\" The preliminary study said that \"the exercise will result in an aggregate 94.4 billion euros recapitalisation for the 27 and in a significant restructuring for the remaining four banks.\" One of these four is Bankia, the subject of a rescue for several Spanish banks agreed by eurozone leaders at the end of June and amended last week, with the money to go directly to the banks so as not to increase national debt. That rescue funding was a key factor in the announcement by the Spanish government on Wednesday of a vast new package of austerity measures totalling 65 billion euros. The EBA recalled that action to raise new capital had to avoid cutting lending to the economy, and said that this had been achieved. The capital action by banks had not cut back lending, it said. \"Overall, EU banks\' new lending levels are driven primarily by credit demand, by banks\' need to de-risk ... by funding shortages, and also by capital constraints.\" On the second prong of the EBA programme, the reduction of risky assets, the report said that banks had disposed of assets worth 90 billion euros or just 1.8 percent of such holdings in September 2011. Much of this had concerned disposal of dollar assets owing to a \"drying up\" of funding in dollars. This concerned mainly \"non-core\" assets by a small number of banks. A European Union Summit had agreed in October last year, that a package of measures including capital increases was needed to reassure investors about the ability of banks to withstand any further shocks. The new rule requires so-called core capital to amount to 9.0 percent of the risks being carried by the bank, subject to a weighting of each category of risk. This is higher than new international rules in response to the financial crisis, known as Basel Three, which require 7.0 percent. Previously, on a different basis, banks had to have a capital ratio of about 5.0 percent. The EBA reached its initial assessment of the strength of bank capital after two rounds of so-called stress tests, but these have been discredited in some circles, and by German Chancellor Angela Merkel, because they excluded risks posed by government debt held by banks. Since then, Spanish banks have been shown to be in a far worse state than was thought and banks have written off huge amounts owed to them by Greece. Cyprus says that this so weakened its banks that it now needs financial help. Government bonds in a number of weak eurozone countries have fallen in value, causing further strains for some banks despite especially easy funding conditions from the European Central Bank on which some banks have become critically reliant. The EBA said that it would issue a final report in September, including details by bank.