BBC News
July 16, 2011
Probably the most significant announcement by the European Banking Authority after publishing the results of tests of the resilience of European banks - so called stress tests - was not the headline-grabbing one, to wit that eight out of 90 banks had flunked the tests (or nine, if you include the German bank Helaba which walked out of the exam in a huff at the last minute).
The shortage of capital to absorb losses in those banks, 2.5bn euros ($3.5bn; £2.2bn), is a rounding error in the context of the losses that could be foisted on the financial system if there were a chain reaction of further crises within eurozone economies
It was what the EBA had to say about banks that only narrowly passed the tests, and have significant exposure to the state debts of Greece, Ireland and Portugal, that reverberated.
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