Seven EU banks fail stress tests

10:45, 24 July 2010

LONDON. July 24. KAZINFORM Seven of the 91 European banks that underwent stress tests have failed the healthchecks, the Committee of European Banking Supervisors (CEBS) has said; Kazinform refers to BBC.

They include five Spanish banks - Diada, Espiga, Banca Civica, Unnim and Cajasur. The other two were Germany's Hypo Real Estate and Greece's ATEbank.

The tests assessed banks' ability to survive future economic shocks.

The seven banks would need a total of 3.5bn euros of new capital to meet the standards required, CEBS said.

"[The failed banks] will have to agree with their respective supervisors a plan over a given time period which will explain how this weakness will be resolved," CEBS chairman Giovanni Carosio said.

BBC business editor Robert Peston said that on the face of it, the results appeared to be "good news", but questioned how severe the tests were.

The weekend will be an anxious time for banks, as they wait to learn whether it will become easier or harder for them to borrow, when markets open on Monday, he added.

Some analysts are already arguing that the tests were not strict enough; Kazinform cites BBC.

See www.bbc.co.uk for full version

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