EU watchdog to test bank capital

The European Banking Authority EBA will name, on 8 April 2011, the 90 or so banks that need to undergo a stress test exercise, which will determine which of them need to raise capital to bolster their defences against economic headwinds.

The EBA, keen to be seen as tough after 2010’s tests flopped, will determine the level of core capital that the banks need to have left on their books when put under the adverse economic scenarios.

EBA: Press Release, 8.4.11: The EBA announces the benchmark to be used in the 2011 EU-wide stress test http://www.eba.europa.eu/News--Communications/Year/2011/The-EBA-announces-the-benchmark-to-be-used-in-the-.aspx

BBC News, 8.4.11: European banks face 'tougher' stress tests http://www.bbc.co.uk/news/business-13013108

ESO: Background information: European banks in further capital calls http://www.europeansources.info/record/european-banks-in-further-capital-calls/

ESO: Background information: Deadline set for EU countries’ failing banks plan http://www.europeansources.info/record/deadline-set-for-eu-countries-failing-banks-plan/

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