Brussels, 03/03/2015 (Agence Europe) - On Tuesday 3 March, the European Banking Authority (EBA) announced that it will not carry out any banking stress tests in 2015.
The European authority takes the view that the health check of the European banking sector (evaluation of the quality of assets by the ECB and stress tests carried out by the EBA), unveiled in autumn of last year, has had positive results in terms of bank recapitalisation on the quality of the information provided (see EUROPE 11185). As this exercise required considerable levels of human resources and had to be planned well ahead of time, it has decided not to carry out any stress tests before 2016.
In 2015, it will carry out a transparency exercise similar to the one it carried out in 2013, which will include the publication of detailed information on the banks' balance sheets and portfolios, but no simulations.
On Tuesday, the EBA published its seventh report on the compliance of the European banks with the 'Basel III' prudential rules, which will be fully applicable from 2019. According to the data available in June 2014, none of the 40 major European banks examined (banks active internationally and with optimum quality CET1 capital exceeding three billion euros) showed a deficit in CET1 capital to achieve the minimum solvency threshold of 4.5%. On the other hand, the cumulative capital deficit to reach the target of 7% (4.5% of CET1 capital + 2.5% capital buffer) is €2.8 billion, or €8.8 billion less than when the EBA's sixth monitoring report was published (see EUROPE 11156). This cumulative shortfall is unchanged when the surcharge for systemically important banks is added in.
As regards the liquidity ratio (LCR), the average ratio of the 40 major banks in question was 113%. 82% of the samples were already meeting the 100% ratio applicable from 2019. The exercise also revealed a shortfall of liquid assets of €115 billion for these banks. (Mathieu Bion)