'Pressure on' for banks passing stress tests

13 July 2011

The pressure will be on for European banks that only just manage to pass stress test scenarios.

Reuters reports that banking sources and analysts claimed lenders that only just make their way through the European Union checks will be expected to considerably boost their capital levels.

Results from the assessments - being made by the European Banking Authority (EBA) - are due for release on Friday (July 15th) at 16:00 BST.

The inspection is considering how 91 institutions would be able to cope amid a number of theoretical strains, such as dips in bond ratings, property and stock markets.

Speaking to the news agency, the head of a German bank said: "I am not aware of any automatic measures that almost failed candidates will have to fulfill within a certain time."

It is expected that more banks will fail the assessments from EBA - which came into being in its current form in January 2011 - this time around than the seven that came up short last year.

By Asim Shah

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