Brussels, 09/03/2011 (Agence Europe) - The European Banking Authority (EBA) reacted immediately on Wednesday 9 March to leaks in the media about details of the bank stress tests for later this year that will be used on some 90 European banks. In a press release, the EBA leader, Andrea Enria, said that it was a fact that the pan-European stress tests for 2011 would be robust and much tougher than those of 2010 but that people should look at the tests as a whole rather than focusing on one or two details out of context. The European Commission has not made any official reaction but is reported to be of the same opinion.
According to the EBA, the agreed hypothesis of a fall in the eurozone's gross domestic product by 0.5% in 2011 and 0.2% in 2012 amounts to a 4% difference from the economic forecasts for 2010 and 2011, above the 3% discrepancy examined in the 2010 tax year. The London-based EBA says that the likelihood of this scenario playing out this year is materially weaker than last year, partly because of the current economic situation and more favourable economic forecasts.
The EBA also states that a new criterion on the cost of banking will be added to the bank stress test this year. The criterion will set the increased cost of bank financing at 1.25% and will impact on the profitability of banks and therefore on their capital requirements. The EBA says the 2011 stress tests will use a tighter bank capital measure and will not allow the artificial shifting of assets off the balance sheet. (M.B./transl.fl)