Brussels, 08/07/2010 (Agence Europe) - The Committee of European Banking Supervisors (CEBS) revealed on Thursday 8 July that stress tests had been carried out on 91 banking establishments, many more than the 22 institutions tested last year.
CEBS said that the results would be disclosed on 23 July. The scope of the stress testing exercise has been extended to include not only the major cross-border banking groups, but also key domestic credit institutions in Europe, CEBS said in a press release. It was decided that the testing should cover at least 50% of national banking sectors, as expressed in terms of total assets. Overall, the 91 banks tested represent 65% of the EU banking sector.
These tests are designed to assess the overall resilience of banks to extreme economic and financial conditions. The regulator assesses the banks and their credit portfolios on economic scenarios and checks that their capital would allow them to resist severe crises without endangering their solvency.
14 institutions were tested in Germany, 27 in Spain, and 4 in each of France, the Netherlands and the United Kingdom. Two scenarios were used: a baseline scenario, where there is no specific deterioration in, macro-economic conditions, and an adverse scenario, which builds in pessimistic hypotheses for 2010-2011. (L.C./transl.rt)