Brussels, 24/11/2014 (Agence Europe) - The British Royal Bank of Scotland (RBS) admitted at the end of last week that it had miscalculated its solvency ratio during the European Banking Authority's (EBA) stress tests, whose results have now been published (EUROPE 11185).
The EBA indicated that the bank, which was 80% nationalised following the financial crisis, provided it with new data that caused its optimum Common Capital Ratio Definition (CET 1) to fall from 6.7% to 5.7% in the adverse scenario used during the stress tests. This was calculated according to the “Basel III” rules applicable by 2019 at the latest in the EU. The European supervisors decided that this threshold should be 5.5%, below which the bank is obliged to strengthen its own funds.
RBS has said it examined how the mistake had been made when it was cooperating with the British supervisors. The bank had only been subject to EBA stress tests but not to the more stringent assets quality analysis by the ECB. The United Kingdom has refused to take part in the banking union that currently exists between eurozone countries. (MB)