15% of Euro banks may fail stress tests
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As many as 15 per cent of European banks may fail a rigourous stress test, according to a report by a German newspaper.
According to a report by Handelsblatt, the European Central Bank has promised “credible” stress tests which will assess the potential for all Eurozone banks to withstand a three per cent drop in GDP as well as another sovereign bond crisis, as seen in the markets earlier this year.
But a leading German banking chief executive told the business paper that as many as 15 per cent of European banks’ balance sheets will not be able to stand up to the tests. He said this may include one or two German banks also.
One analyst told the paper that some of the state aided banks will not pass a rigourous and said many others will have to reconsider their capital bases after the tests, which are scheduled for July 23.
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