sábado, 1 de noviembre de 2014

sábado, noviembre 01, 2014

ECB: 25 banks not strong enough to withstand another crisis

Twenty-five of 130 European banks have failed the ECB and EBA's financial healthcheck - but all British banks pass

By , , James Quinn and Ben Martin
9:30AM GMT 27 Oct 2014.
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This is the first time the ECB is running the tests Photo: REUTERS
 
 
A total of 25 lenders failed the European Central Bank's (ECB's) "stress tests", which were billed by Brussels as "most intense scrutiny that banks have ever undergone in Europe". The scenarios simulated how banks would fare if Europe collapsed back into recession, unemployment rose and house prices collapsed.
 
The ECB identified a €25bn (£19.7bn) black hole in the balance sheets of these lenders.

However, as they covered the banks' positions at the end of last year, and many had taken subsequent steps to shore up their capital buffers, the central bank said just 13 banks would need to raise an additional €9.5bn in capital. This is well below the €30 to €50bn shortfall expected by some analysts.
 
Vitor Constancio, vice president of the ECB said the tests would help to unlock more lending in Europe and boost economic growth. "This unprecedented in-depth review of the largest banks' positions will boost public confidence in the banking sector," he said.
 
The banks still facing a shortfall now have two weeks to outline to the ECB and European Banking Authority (EBA) - which also supervised the stress tests - how they will find the extra capital. Italian lender Banca Monte dei Paschi di Siena, the world's oldest bank, faces the biggest shortfall.  
 
Regulators said it must find €2.1bn of extra capital despite already raising a similar amount this year. Investors took fright at the news on Monday and sent shares in the Italian lender plunging more than 17pc before the stock was suspended from trading.
 
The Italian market regulator, Consob, also banned short-selling of the bank's shares.
 
Meanwhile, fellow Italian lenders Banca Carige and Banca Popolare di Milano, which also failed the stress tests, both fell heavily in early trade.
 
Britain's four biggest banks all passed the EBA's latest round of stress tests, which requires banks to have common equity tier one ratios of more than 5.5pc even under the most “adverse” scenario. 
 
However, Lloyds was left with the weakest capital position. Under the adverse scenario, the EBA said its capital base would be eroded to 6.2pc, from a starting point of 10.2pc. RBS was the next weakest, with capital of 6.7pc under stressed conditions, down from 8.6pc. HSBC was judged to be the most resilient of the four banks.
 
A Lloyds spokesman welcomed the results of the test. "This strong position reflects the steps taken by the group's management over the last three years to return its balance sheet to a robust position, and we will continue to use this strong basis to help Britain prosper," they said.
 
Nevertheless, shares in the bank were among the heaviest fallers in the FTSE 100 in early trade on Monday, sliding as much as 2.7pc. RBS stock lost as much as 2.2pc.
 
Several banks that failed the test said they had already raised enough capital to meet any shortfall. Portuguese lender Banco Comercial Portugues said it had raised €2.24bn of Tier 1 eligible capital by the end of September, enough to cover a €1.14b shortfall based on last year’s accounts.
 
The ECB also identified €136bn in new troubled assets, known as non-performing loans, on Sunday, mainly stemming from the property and corporate sector.
 
Andrea Leadsom, economic secretary to the Treasury, welcomed the results. "A key part of our long term economic plan is to strengthen UK banks so that they can support the economy, help businesses, and serve customers," she said. "I’m pleased to see that the UK banks have passed the EBA stress tests. This shows our robust reforms to build a more resilient banking sector are working."

Colin Brereton, economic crisis response lead partner at accouning giant PwC, said: "Although this should restore some confidence and stability to the market, we are still far from a solution to the banking crisis and the challenges facing the banking sector.
 
"The Comprehensive Assessment was only a one-off test of solvency, not of ongoing viability. The test of long-term viability is whether banks can generate sufficient returns to cover all their costs, including capital costs."

All four big UK banks plus another four banks and building societies are facing much sterner stress tests from the Bank of England. The Bank will release the results of its own tests in December. 
 
The EBA's previous stress test in 2011 was criticised for being too soft and not taking into account the possibility of a sovereign default.

- IN FULL: the 25 banks to fail the ECB test
 
Eurobank
Monte dei Paschi di Siena
National Bank of Greece
Banca Carige
Cooperative Central Bank
Banco Comercial Português
Bank of Cyprus
Oesterreichischer Volksbanken-Verbund
permanent tsb
Veneto Banca
Banco Popolare
Banca Popolare di Milano
Banca Popolare di Vicenza
Piraeus Bank
Credito Valtellinese
Dexia
Banca Popolare di Sondrio
Hellenic Bank
Münchener Hypothekenbank
AXA Bank Europe
C.R.H. - Caisse de Refinancement de l’Habitat
Banca Popolare dell'Emilia Romagna
Nova Ljubljanska banka
Liberbank
Nova Kreditna Banka Maribor

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