EU Bank Stress Test: Here's The Full Package

7 out of 91 European banks have failed the much debated stress test performed by the The Committee of European Banking Supervisors (CEBS), the EU administration says. Here’s all the published material, so far.

The Committee of European Banking Supervisors, or CEBS, a group of European Union regulators which advises the European Commission on regulatory issues, has released results of the stress tests on 91 banks representing 65% of the region’s banking assets. The CEBS says seven of the 91 banks reviewed “failed” the E.U. stress tests.

The tests are designed to see how a bank’s assets and liabilities perform during a simulated period of economic turmoil and whether they hold enough capital to absorb losses and large enough liquidity buffers for them to remain solvent.

The IMF stated earlier this week that the tests should provide further stability moving forward, Caroline Atkinson, Director of External Relations for the IMF commented.

This is the joint press release from CEBS, ECB and the EU Commission:

The Committee of European Banking Supervisors (CEBS), the European Central Bank (ECB) and the European Commission welcome the publication of the results of the EU-wide stress-testing exercise, which was prepared and conducted by the CEBS and national supervisory authorities, in close cooperation with the ECB.

We support, in particular, the transparency of this exercise, given the specific market circumstances under which banks currently operate. We therefore welcome the publication of banks’ individual results, particularly their respective capital positions and loss estimates under an adverse scenario, as well as detailed information on banks’ exposures to EU/EEA central and local government debt. Such disclosures ensure transparency regarding conditions in the EU banking sector.

The adverse scenarios used in the stress test are designed as “what-if” scenarios reflecting severe assumptions which are therefore not very likely to materialize in practice. Accordingly, the results of the test confirm the overall resilience of the EU banking system to negative macroeconomic and financial shocks, and are an important step forward in restoring market confidence.

Where the results of the exercise indicate that individual banks require additional capital, these banks should take the necessary steps to reinforce their capital positions through private-sector means and by resorting, if necessary, to facilities set up by Member State governments, in full compliance with EU state-aid rules.

Here’s the latest news report from TradeTheTrend:


Here’s the excecutive summary of the CEBS report.

Here’s the full press release from CEBS.

And here’s the details of the test.

The three EU institutions have worked out a comprehensive “Questions&Answers” document.

Nor exactly “all you ever wanted to know, but were afraid to ask”……

Here it is.

I will update you on further on what these stress tests mean for the broader economy, as well as how the markets are reacting.

Related by the Econotwist:

To Europe From Goldman Sachs On The Stress Test Eve

Financial Authorities See No Point In Stress Testing Norwegian Banks

All Nordic Banks Will Pass Stress Test, Nordea Says

European Bank Stress Tests Are Loosing Credibility

The EU Stress Test: Working The Media

Bundesbank: Ireland Will Destroy The Euro Zone

EU Stress Test May Trigger Capital Injection Of EUR 85 Billion


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