ECB said to fail 25 banks
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.