July 16, 2011
European regulators, trying to douse the Continent's financial crisis, unveiled the long-awaited results of their banking "stress tests," but the small number of lenders that flunked the exams immediately provoked skepticism.
The European Banking Authority said eight of the 90 banks it examined fell short of the required amount of capital under the tests' simulations of a deep, two-year economic downturn. Those banks faced a total shortage of €2.5 billion ($3.54 billion) of capital, which banks rely on to soak up potential losses.
Analysts and investors were bracing for as many as 20 banks to fail and to need to raise tens of billions of euros of new capital. Last year's tests, widely discredited for being overly lax and inconsistently enforced, saw seven lenders fail, with a combined deficit of €3.5 billion.
The eight banks that failed included five from Spain, two from Greece and one from Austria. All are relatively small. A ninth bank, German public-sector lender Helaba, was poised to fail, but this week it forbade the EBA from publishing its results.
More
Read the Full Report
No comments:
Post a Comment