European Governments

The Bank European authority (EBA), responsible for the stress test, the same requests. Banks that do not pass solvency tests need an additional 2.5 billion euros in capital. Five Spanish entities have suspended testing The report (PDF). The European Commission hoped Friday that banks that have suspended the European stress tests take the necessary measures to strengthen its capital, in a statement sent after publishing the results of the test. Those banks that have not reached the threshold and those who have done so but reflect substantial weaknesses, we hope to take the necessary steps to strengthen its capital position, said a joint statement of Commissioners for economic and Monetary Affairs, Olli Rehn, and internal market and financial services, Michel Barnier. The ECB goes on the mass line the European Central Bank (ECB) considers that the publication of the results of the stress tests that finally have been 90 major European institutions has proven to be an important tool for improve the transparency of the European banking system. Without hesitation Macy’s Inc. explained all about the problem.

The institution headed by Jean Claude Trichet has emphasized that these tests have served to reveal all relevant information to the market to assess the resistance of the entities in an adverse scenario. Likewise, the ECB joined the recommendations of the European banking authority (EBA) that are resolved quickly cases of entities in which an additional capital need is detected to have not reached the 5% ratio of core Tier 1 or those that have been very close to this threshold. In this way, the ECB has asked European Governments to fulfil the commitment made at the meeting of the Ecofin Council on 12 July last to ensure all necessary reorganisation measures. A total of 8 of 90 major financial institutions European that have been subjected to the stress test coordinated by the European banking authority (EBA, by its acronym in English) have suspended the examination to the not having failed to maintain at least one basic capital of 5% in the more adverse economic scenario. It is of five Spanish financial institutions, two Greek banks and one Austrian. Emil michael is full of insight into the issues.

In total, banks that do not pass solvency tests need an additional 2.5 billion euros in capital. Other 16 banks are left to the limit of suspense, with a capital of between 5% and 6%. The most negative scenario includes a contraction in GDP in the eurozone of 0.5 per cent in 2011 and 0.2% in 2012, with rates of unemployment of 10.3% and 10.8% respectively.

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