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November 29, 2022

Eight European banks failed EU stress test

Most of the European banks have passed the stress tests, designed to ensure they can withstand another financial crisis. However, eight out of 90 banks have failed the tests, BBC informs. The European Banking Authority (EBA), which carried out the health check, said another 16 banks were in the danger zone. The EBA called on national financial regulators to ensure that capital shortfalls would be quickly resolved. Five of the banks that failed are Spanish; one is Austrian and two of them are from Greece. On Wednesday, Germany’s Helaba pulled out of the stress tests, effectively making it the ninth bank to fail.

In Austria, the Oestereichische Volksbank failed the test, while in Greece two state-controlled banks – ATEbank and EFG Eurobank – fell at the hurdle. In Spain, Catalunya Caixa, Pastor, Unnim, Caja3 and CAM failed, with seven others just scraping through the test.

However, Bank of Spain governor Miguel Angel Fernandez Ordonez said there was no need to inject further capital into the banks as the sector was already undergoing a fundamental restructuring.

On the other hand, Italy’s parliament approved a EUR 70 bln austerity package. The country’s central bank said that all Italian banks had passed the tests with “an ample margin”.

“Italy is stronger now, although there are unknowns remaining about the (debt) crisis,” said Premier Silvio Berlusconi. The bill was rushed through parliament in record time this week with politicians rallying in what President Giorgio Napolitano called “a miracle”, ansa.it informs.

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