EU Cooks Up a Stress Test for 2016 That No Bank Will Fail
- Concern about EU banks' ability to withstand shock lingers
- Tests feed into SREP, won't have a headline pass/fail ratio
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Fifty-three European Union banks will undergo a stress test with a difference next year: none of them will fail.
The European Banking Authority said on Thursday that its 2016 stress test won’t judge banks against a single capital threshold as in previous exercises. The results are intended to be used by EU supervisors in their annual review of banks’ resilience, “under which decisions are made on appropriate capital resources and forward-looking capital plans are challenged,” the EBA said in a statement.