Are Europe’s banks crisis-proof?
Banks from England and Germany are particularly vulnerable in times of crisis concludes EBA as part of its Europe-wide stress test. The European Banking Authority reviewed the capital base of a total of 48 European banks. The latest test measured banks’ ability to withstand theoretical market shocks like a rise in political uncertainty against a backdrop of plunging economic growth, a disorderly Brexit or a sell-off in government bonds and property.
In Germany, Deutsche Bank, which only has a core capital ratio of 8.1% in the stress scenario, and NordLB’s performance was particularly poor (7.1). All in all, only three banks in Europe performed weaker than the Norld LB: the Italian Banco BPM (6.7) and British banks Lloyds (6.8) and Barclays, which, with a core capital ratio of 6.4% took last place in this year’s stress test. Reuters