Banks face new European stress tests |
| Financial Times - Oct 9, 2011 |
Europe’s top banking regulator has started to re-examine the strength of the region’s banks, modelling a big writedown of all peripheral eurozone sovereign debt.
The exercise, conducted by the European Banking Authority, could potentially identify capital shortfalls across the banking system of as much as €200bn ($266bn).
The EBA, which is mid-way through a two-day crisis board meeting designed to assess the potential hit of mass sovereign restructurings, will use market values, to set “haircuts” on banks’ sovereign holdings.
The regulator is also closely involved in talks with European officials and governments over mechanisms that could be used to forcibly recapitalise banks, enabling them to cope with sovereign defaults.
Read Full Article from Financial Times
- Posted: 2011-10-09 06:42:56
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