EBA: European banks are predominantly solid position – ZEIT ONLINE

Europe’s major banks are generally well-positioned for new crises. At this year’s stress test of the European Banking Authority, the in recent years significantly increased capital reserves proved relatively stable. However, individual banks showed significant weaknesses. “The results show resilience in the EU banking sector as a whole, thanks to significant recapitalization,” it says in the EBA report.

Banks should put the stress test to prove that they would with their capital reserves through a new financial and economic crisis. These checked the EBA in recent months a total of 51 financial institutions from 16 countries. The test had to face, including the German bank, Commerzbank and the Landesbanks of Bavaria, Baden-Württemberg, Hesse and Thuringia and Lower Saxony and Saxony-Anhalt also nine German banks. We tested how the banks would be placed at massive economic shocks in Europe. For this year and next was a shrinking by 1.2 percent and 1.3 percent economic, laid in 2018 only 0.7 percent growth basis. What is new is that even legal risks were involved, for example fines, need to pay the banks.

All nine German banks proved equipped to be sufficient, although in some cases just barely. The highest for NRW Bank from which also proved itself in the worst shock with a hard core capital ratio of 35.4 percent. The German bank cut from 7.8 percent, Commerzbank with 7.4 percent. The weakest capital ratio showed in the test as expected the Italian bank Monte dei Paschi with a negative capital buffer of minus 2.44 percent.

Complete failures were excluded from the outset. Unlike the previous test, the examiner this time renounced exact specifications required capital ratios. Instead, the financial results were included in the assessment of the business models and risks of institutions. In previous stress test were flunked 2014 123 Banks 24th They lacked together 24.6 billion euros. Bundesbank board member Andreas Dombret warned before the release of hasty conclusions. “It is in this stress test not to pass or fail” Dombret said. “The results do not lead directly to hard prudential capital measures.”

The focus of the tests in particular were the Italian financial institutions. They are estimated to have accumulated bad loans of 360 billion euros. Critics speculated before the release that the results could be used to to support the Italian crisis bank Monte dei Paschi and possibly other financial institutions with taxpayers’ money.

Before such a step warned MEPs. “The European Commission must not misuse the results of stress tests to grant to the Italian Government for the release of bank bailouts with public money,” said Friday the Treasury spokesman of the Green Group in the European Parliament, Sven Giegold. The stress test was so soft that he was unfit for decisions on aid and banking supervision. Similarly, the CSU MEP Markus Ferber expressed.

The European Central Bank (ECB), meanwhile, has approved the rescue plan for Monte dei Paschi. In addition, the ECB has approved the sale of bad loans, said Director Antonini Turicchi. The plan is the sale of a loan package worth around ten billion euros. The banking consortium stand that guarantees the five billion euro capital increase of the financial institution, Turicchi said.