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24 European banks fail financial ‘stress test’

Twenty-four European banks have failed a “stress test” carried out by the European Banking Authority and now have nine months to boost their capital or risk being shut down.

The BBC reports that no UK banks failed the stress test, although Lloyds Banking Group only passed narrowly.

The EBA carried out the checks on 123 EU banks to test how they would cope in the event of another financial crisis.

The list includes 10 banks which have taken measures to shore up their finances since the end of 2013 when banks’ financial strength was assessed.

There are four Italian banks, two Greek banks, two Belgian banks and two Slovenian banks which failed.

The UK banks that were subjected to the test: Royal Bank of Scotland, HSBC, Lloyds and Barclays.

Lloyds passed with capital under adverse scenarios of 6.2 per cent, against a 5.5 per cent benchmark.

In a statement, Lloyds says: “We welcome the EBA’s confirmation that Lloyds Banking Group meets all the capital benchmarks set out for the purpose of the stress test, and that the group is not required to take any action as a result of the test.”

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