Göteborg, 02/10/2009 (Agence Europe) - Meeting in Gothenburg in Sweden on Thursday 1 October 2009, European Union finance ministers and central bankers were briefed about the outcome of research by the Committee of European Banking Supervisors (CEBS) on the ability of 22 pan-European banks to survive any further deterioration of the economic and financial situation. Within the parameters set out in these stress tests (a 5.2% fall in EU GDP in 2009 and a 2.7% fall in 2010), the potential losses that would be incurred by Europe's banks would be in the region of €400 billion over two years. The Tier 1 solvability ratio forecasts, however, show that all 22 banks would have sufficient levels of capital based on their own resources and state support and funding. These encouraging results should, however, be taken with a pinch of salt in that the scenarios examined are subject to huge uncertainty in terms of impact and only 60% of EU bank assets were covered by the stress test. In a statement published on Thursday, EU finance ministers and central bankers welcomed the tests by the national supervisors that were consolidated by the CEBS. They were pleased that in the conditions applied in the test, big European banks seemed to have sufficient capital to face a severe deterioration of the macroeconomic situation. They add that banks should continue to strengthen their financial position while continuing to supply credit to the economy. “Even with this rough stress testing, we see that our system is resisting in a way which is reassuring,” said President of the European Central Bank Jean-Claude Trichet. He added that there was “no contradiction” between the CEBS study and a recent IMF report which states that Europe is behind the United States in putting losses on the balance sheet because of differences in the economic cycle. The idea is doing the rounds that new stress tests might be carried out in the spring of next year. (M.B./transl.fl)