Financial Times
April 8, 2011
European banking regulators have set up a dispute with German authorities, pressing ahead with a tight definition of capital for planned stress tests and making it more likely that Germany’s state-owned Landesbanken will fail.
The European Banking Authority on Friday disclosed that it had set a 5 per cent core tier one capital ratio as the passmark for the stress tests in which 90 banks would take part.
Five new banks – Ireland’s Irish Life & Permanent, Norway’s DNB Nor, Denmark’s Nykredit, Slovenia’s Nova KBM and Austria’s Oesterreichische Volksbank – will be tested this year. The 2010 exercise involved 91 banks, but several of those, particularly Spanish savings banks have since merged.
Last year’s exercise, designed to restore market confidence in the health of Europe’s banks, proved farcical, with the Irish banking system collapsing only four months after the country’s banks passed the test.
The EBA insists this year’s test, which will be conducted over the next month with the results to be published in June, is tougher, with more pessimistic projections of gross domestic product growth and property market prices. However, critics point out that several measures are more benign, and that the parameters are too narrowly focused on the issue of eurozone sovereign debt.
More
No comments:
Post a Comment