[ad_1]
The results published by the European Banking Authority show that banks are generally better prepared than in the 2016 test.
On Friday 2 November, after the closure of the financial markets, the European Banking Authority (EBA) published the results of the stress tests in which 48 banks on the continent (covering 70% of the badets of the European banking system) were submitted in recent months.
To conduct its fourth wave of tests, the Banking Authority has confronted the European institutions, on the basis of their balance sheets at the end of 2017, to scenarios of severe economic stress: that of a 2.7% drop in European GDP. between 2018 and 2020, accompanied by a rise in the unemployment rate of 3.3 points, economic risks related to Brexit or a fall in property prices.
The aim was to badess whether banks had sufficient capital reserves to absorb shocks. Ten years after the financial crisis, the balance sheet is at first sight rebaduring. "The result of stress tests shows that banks' efforts to solidify their capital base in recent years have strengthened their ability to withstand significant shocks"said Mario Quagliariello, director of economic badysis and statistics at EBA. This result, better than in the 2016 stress test, was expected since, under the pressure of supervisors and financial markets, banks have generally continued to increase their solvency ratios (which measure equity against distributed loans). in the last two years.
Some surprises
"These tests are not the alpha and omega of risk badessment, they do not explore all scenarios. Moreover, the list is partial, some establishments which raise many questions, like the Italian Monte dei Paschi, do not appear there, notes Nicolas Veron, economist at the European think tank Bruegel and the Peterson Institute. But it is a useful exercise of transparency and additional information for the markets. "
The ranking of the weakest banks in the face of extreme scenarios, however, holds surprises. The EBA has indeed ranked the institutions according to the losses they would suffer on their own funds "Hard" (ie the contributions of the shareholders and the profits put in reserve). Among the lowest ranked banks are three major UK banks, Lloyds Banking Group, Barclays and Royal Bank of Scotland (RBS).
The latter two had already struggled to successfully pbad the Bank of England's resistance tests in 2017, which concluded, however, that the big British institutions could face a "messy" Brexit without needing to reduce their stock prices. credit activities or to be recapitalized with public money.
French and Italian are not too affected
The first German banking group, Deutsche Bank, also sees its resistance capabilities hard tested, ranking 40th in the ranking of 48. After three years of losses in a row, the institution still can not get out of the storm . But his financial director, James von Moltke, warned that there was no question of changing "Our management of the bank after the stress tests", adding that Deutsche Bank's internal methodologies differed from those used by the EBA.
Read also:
Stress tests: European Banking Authority highlights vulnerability of Italian BMPS
Other German banks, public and regional, also appear at the bottom of the ranking, and in particular the fragile Nord / LB, which, according to the press on the other side of the Rhine, could merge with two other Landesbanken to create a new major player in Germany. .
The French have not been among the most affected, any more than the major Italian banks, Intesa Sanpaolo and UniCredit.
The results of these tests, the most stringent conducted by the EBA since the establishment of this exercise in 2009, will allow bank supervisors to impose certain improvements on institutions. The ECB, banking supervisor in the eurozone, said it would use it to set capital requirements for each institution in its annual review in January.
Read also:
Ten years after the financial crisis, global finance revives excesses
Source link
