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One third of the Italian banks failed tests

Stress tests of the ECB’s and the European Banking Agency (EBA) has not passed 25 European banks out of 130 major banks in the euro area. One third or more precisely 37.5 percent of them are the Italian banks.
The “failed” banks will have to within two weeks submit plans to ECB to improve its capital strength. ECB will review the reports so the actual assessment of potential capital shortfall of individual banks will really be known until in a month.
The European Commission in response to the outcome, stressed that it is “absolutely crucial consistent and timely action”, on the basis of the findings of this exercise. The priority will be to ensure that the capital shortfall is covered by private sources and not by the taxpayers. However, this does not mean that the state support will not be requiered and the Commission will ensure compliance with the rules on state aid.
Slovenian NLB and NKBM both fall on the stress test, but Governor of the Bank of Slovenia Bostjan Jazbec said it will not effect the taxpayers.

 

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