Bloomberg News

European Bank Stress-Test Results Said to Be Delayed Until July

June 01, 2011

June 1 (Bloomberg) -- This year’s round of European Union bank stress-test results may be delayed until next month, a European Banking Authority official said.

The EBA, which is conducting the stress tests, has asked banks to submit more information, the official, who declined to be identified by name because the talks are private, said today. The EBA said as recently as March that it would publish the results this month.

A date for publication hasn’t been set, because the EBA must ensure it is satisfied with the quality of submissions from the banks, the EBA official said today.

Ninety banks will be expected to maintain a Core Tier 1 capital ratio of at least 5 percent under the stress-test scenarios, the EBA has said. This year’s exams will include a review of how lenders would handle a 0.5 percent economic contraction in the euro area in 2011 as well as a 15 percent drop in European equity markets.

The EBA tests will also examine the effect of a 75 basis- point-jump in interest rates on European sovereign bonds and an increase in short-term inter-bank financing costs of 125 basis points.

--Editors: Christopher Scinta, Peter Chapman

To contact the reporter for this story: Ben Moshinsky in London at bmoshinsky@bloomberg.net.

To contact the editor responsible for this story: Anthony Aarons at aaarons@bloomberg.net.


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