European banks seeking to recapitalize and meet new goals set for them by regulators are seeking to do so largely through internal actions than by raising outside funding from investors, and analysts are not impressed by the method.

Indeed, the European Banking Authority reduced the amount originally estimated necessary, and banks already seeking to avoid hitting investors or taking government funds with strings attached are trying to use other measures to reach the target of 9% of core capital reserves.

Bloomberg reported that some of the strategies in play by banks are adjustments in risk weightings, limitation of dividends, retention of earnings, reductions in loans and sales of assets. Banks had even threatened to drop lending and risk bringing on a recession rather than resort to government funds that would require them to meet limits on dividends and bonuses. European Union policymakers are already pushing for such limits.

The Banking Authority has also played its part; the authority, which oversees the banking regulators of the region, has reduced the amount of core capital required via changes in its calculations to offset peripheral national debt writedowns with gains on U.K. and German bond holdings by banks; those bonds are currently trading for more than face value.

Such moves have not wowed analysts. Philippe Bodereau, head of credit research at Pacific Investment Management Co. in London, was quoted saying, “The issue is how much fresh capital will be brought in. It would be positive if we saw banks launching rights issues, but they won’t. This is hardly shock and awe.”

Peter Hahn, a professor of finance at London’s Cass Business School and a former managing director at New York-based Citigroup, said in the report, “Surely, no one thinks that by allowing banks to avoid raising capital in all these various ways it’s going to give investors more confidence. Part of the issue for a long time has been the lack of credibility of bank balance sheets and their risk models. This isn’t going to help.”

Last week EU leaders ordered banks to raise the ratio of “highest quality” capital they hold by the end of June. That created a shortfall of 106 billion euros ($150 billion). But Huw Van Steenis, a Morgan Stanley analyst, wrote in an Oct. 28 report that of Europe’s 28 largest lenders, only eight will have to raise a total of 11 billion euros from investors. If the largest banks only raise a tenth of the estimated total capital shortfall regulators mentioned, there is concern that the plan to shore up eurozone banks could fail.

Spanish banks need to raise 26 billion euros, but according to Van Steenis, 9.7 billion euros can be found through converting hybrid securities into equity. Spanish banks also plan to rely on profit and changes to the way they calculate risk-weighted assets to meet the target. Basel rules allow firms to use internal models to decide how much capital to assign to assets based on their own assessment of a default. They are not obliged to disclose models, and banks can come up with different risk weightings for the same assets, according to regulators and analysts.

“The fact that the 26 billion euros could end up with less than 5 billion euros from capital-raising is a concern,” Van Steenis commented.