A new financial crisis would not survive the European banks. This conclusion, however, is not the stress test of the European Banking Authority (EBA) and the European Central Bank (ECB), whose results will be presented later this Friday night. This is the result of an endurance test of the Centre for European Economic Research (ZEW). If the stock markets tumble in the next six months by 40 percent, while European banks losses of up to 882 billion euros are to be expected. Not only the banks from Italy and Spain would then have a high level of capital, but also the institutions from Germany and France.
But in Germany showed the representatives of the banking industry before the release of the stress test results allowed more. This is not only because that could fall through any of the 51 affected banks in this year’s tests of resistance. “The institutions have become more resistant”, Sparkasse President Georg Fahrenschon said Friday the Germany radio.
Similarly confident had shown in the past few days also the chief executive of private banking association, Michael Kemmer,. He had expected no distortions at a German bank. were tested a total of nine German institutes, including Commerzbank, German bank and four Landesbanken. However, the results of Deutsche Bank were eagerly awaited. After the poor results in the second quarter the capital difficulties of Germany’s biggest bank have come to light again.
crisis bank Monte dei Paschi is considered shaky
Before major difficulties the banks are in Italy, suffer from bad loans of 360 billion euros and their capital requirement is estimated at 40 billion euros. Above all, the crisis bank Monte dei Paschi is considered shaky. That it is in the stress test perform poorly, appeared on Friday in efforts to the ailing bank from Siena. It was about a capital increase of 5 billion euros, for even lines from banks had to be obtained.
The major bank Unicredit has capital needs, which is reflected by the price decline of the stock. The title of the parent company of the Hypo-Vereinsbank has lost this year, nearly 57 percent more than the share of Deutsche Bank, which has fallen by 46 percent. Finally, in recent weeks circulated yet analysts estimate that at Banco Popolare even after the capital of 1 billion euros – failed on the stock exchange and finally paid by the state rescue fund “Atlante.” – Continue to see capital shortfall
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As the FAZ had reported that the assessment of the European Commission is a government rescue of crisis Banks in Italy not necessary. Sparkasse President Fahrenschon asks that shareholders would have to bear the costs of remediation. The major Italian banks had paid a total of more money in the last seven years as if they had retained to strengthen the capital base, he said. According to the EU Commission, the Italian Government, however, can compensate even small savers who hold subordinated bonds at risk of default. Such risky papers had sold its customers the banks. But in compensation the state would save a specific group of creditors. That would make the EU resolution Directive undermined so Jochen Felsenheimer, Managing Director of Munich asset manager Xaia. He considers this to be a fatal error.
Alexander Plenk, Head of Investment Research of Bayern LB, sees this as a state aid and an infringement of the EU resolution Directive. “A certain group of creditors would with government funds in preference to others.” The institutional investor would bear the losses of private customer would be compensated by the state, although he long time, higher interest rates have not received due to the higher risk of this debt, so Plenk.
Bank representatives criticized assumptions
this year’s stress tests have been criticized by bankers because of the assumptions. So the imputed economic downturn in Italy was weaker than in Germany, which favored Italian banks. From all the camps of the German banking industry, the absence of negative interest rates in the stress test has been criticized. The ECB wanted to avoid conclusions about its monetary policy.
In addition, the banking supervisors of the ECB has been criticized for the difficulties of Italian banks not to be addressed quickly. Because the high loads of non-performing loans have been known at least since the stress tests in the fall, 2014.
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