ECB said to fail 25 banks

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Twenty five European banks are set to fail the ECB Comprehensive Assessment to be published on Sunday, Bloomberg revealed today.

The test assesses the financial health of 130 eurozone banks covering approximately 82% of total bank assets in the eurozone.

It is part of the Comprehensive Assessment which is carried out by the ECB in cooperation with national supervisors, in a bid boost confidence in the European banking system. Draghi has stated earlier that banks would need to fail in order to reinforce the credibility of the test.

Banks will have six months to recapitalise any shortfalls resulting from AQR and baseline scenario of the stress test  and nine months to recapitalise shortfalls from an adverse scenarios of the stress test.

While rumours of specific banks failing were denied by the ECB earlier this week, it did not challenge the latest report. However, negotiations are said to continue and the final figure of banks failing the test may be subject to change, Bloomberg reports.

ABOUT THE AUTHOR
Mona Dohle
Mona Dohle speaks German and Dutch, she is DACH & Benelux Correspondent for InvestmentEurope. Prior to that, she worked as a journalist in Egypt and Palestine. She started her career as a journalist working for a local German newspaper. Mona graduated with an MSc in Development Studies from SOAS and has completed the CISI Certificate in International Wealth and Investment Management.

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