Seven banks fail stress test
The results of the stress test, which subjected 91 banks from 20 EU Member States to a number of worst case scenarios, were announced on Friday evening. It appeared that seven smaller banks were still not resistant to the impact of a new financial-economic crisis. Another eleven banks only barely achieved passing scores.
Five of the seven banks which failed the test are Spanish savings banks or caja´s: the Banca Civica, Casajur, Diada, Espiga and Unmin. One German and one Greek bank also received a grade of unsatisfactory, the Hypo Real Estate and the ATE Bank, respectively. Together the banks fell around 3.5 billion euros short of passing the test.
The stress test was designed to demonstrate whether the European capital market could survive a new crisis and recession in one piece. The 91 banks represent a good 65% of the European banking world. With 84 passing banks, the European Commission is now confident that the European capital market is strong enough to weather any new financial-economic storms.
Belgium's resigning Minister of Finance Didier Reynders (MR), speaking on behalf of the Belgian Presidency of the Council of the European Union, also expressed his satisfaction with the results. He emphasised that the positive results are proof of the hard work done over the past year.
