The European Union will stress test it’s banking system to determine it’s resilience to the economic downturn and find out if it is adequately capitalised by September, according to EU sources.
The stress tests will be conducted by national supervisors according to common guidelines and methodology issued by the Committee of European Banking Supervisors.
One source said “The decision was taken by the EU finance ministers. They decided to ask the Committee of European Banking Supervisors to organise a stress test” adding “But it is not a stress test of individual institutions like the Americans are doing. It is more a highly aggregated stress test, which would show the degree of resilience of the overall EU banking sector.” The source added “It would show if there are additional capital requirements or if banks are adequately capitalised for the present situation.”
