EBA to re­lease the re­sults of its lat­est stress test on 29th

The Pak Banker - - COMPANIES/BOSS -

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.

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