EBA to release the results of its latest stress test on 29th
The European Banking Authority will release the results of its latest stress test on July 29. The exam is intended to give supervisors across the 28-nation European Union a common basis for measuring and bolstering lenders' financial resilience. In a break from past practice, the test has no pass/fail mark and won't specify capital shortfalls. The publication has taken on additional importance this year because of its connection to Italy's attempts to shore up banks weighed down by about 360 billion euros ($396 billion) of nonperforming loans.
Fifty-one banks with a minimum of 30 billion euros in assets and representing about 70 percent of total EU bank assets. That's down from 123 banks in the 2014 exercise. The EBA said it "decided to focus on a more homogeneous sample of large banks to ensure greater comparability." Smaller banks will be tested separately by their supervisors as part of the review and evaluation process. Five Italian banks are in the list, including Banca Monte dei Paschi di Siena SpA, a focus of state-aid discussions between the European Commission, the EU's executive arm, and the government of Prime Minister Matteo Renzi. Monte Paschi failed the EBA's 2014 test with a net capital gap of 2.1 billion euros.