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Capital
shortfall of €25 billion detected at 25 participant banks * Banks’ asset values
need to be adjusted by €48 billion, €37 billion of which did not generate
capital shortfall * Shortfall of €25 billion and asset value adjustment of €37
billion implies overall impact of €62 billion on banks * Additional €136 billion
found in non-performing exposures * A diverse stress scenario would deplete banks’
capital by €263 billion, reducing median CET1 ratio by 4 percentage points from
12.4% to 8.3%
Comprehensive
Assessment – ECB
Aggregate
Report – ECB
Press
conference Danièle Nouy – ECB
How the
European Stress Tests Worked – WSJ
Quicktake:
Stress Tests - Restoring Faith in Banks – BB
About 25
Eurozone Banks to Fail ECB Stress Tests – WSJ
List
Includes Italian Banks but None From Germany or France
ECB
Announces Stress Test Results: Here Are The 25 Banks That Failed – ZH
ECB
Stress Tests: How Good Were Banks at Valuing Their Assets? – WSJ
25
European banks fail stress test, 12 have fixed holes already – Reuters
ECB Test
Shows 25 Billion-Euro Capital Gap at Euro Banks – BB
Twenty five
of the euro zone's 130 biggest banks have failed a landmark health check and
ended last year with a collective capital shortfall of 25 billion euros…A dozen
of those banks have already addressed the gap by raising 15 billion euros over
the course of this year.
A
Country-by-Country Breakdown of the Stress Test Fails – WSJ
Nine
Italian banks fail EBA stress tests – FT
Here Are
the European Banks That Failed the Stress Tests – WSJ
The ECB
banking stress tests explained – Not
a Yes Man
Now the
Stress Tests Are Over, Can the Eurozone Economy Be Fixed? – WSJ
ECB
fails 25 banks in stress test, but capital needs low – Reuters
Roughly one
in five of the euro zone's top lenders failed landmark health checks at the end
of last year but most have since repaired their finances, the European Central
Bank said.
ECB's
Constancio says sees slight pick-up in loan demand – Reuters
Monte
Paschi has biggest capital gap in ECB tests, may seek merger – Reuters
Eurobank,
National Bank Plans May Cut Capital Gap to Zero – BB
Yet
another eurozone bank whitewash – Philippe
Legrain
Even if you
take the ECB at its word, the exercise is not comprehensive, nor are the stress
tests particularly stressful.
Europe’s Good-Enough Bank Stress Tests – WSJ
The trick
for the ECB was to make the tests difficult enough that markets see them, and
by extension bank-balance sheets, as credible, without producing so dire a
result that it raises fresh doubts about the financial sector
Euro
area: Stress tests behind – not the stress – Nordea
Beyond
doubt this was a more credible stress test than similar exercises done before
and the remaining capital needs seem manageable. Banks in the stagnating Euro-area
economies may now be more willing to lend, but other obstacles remain. The
macro environment will continue to be challenging. There is likely to be some
relief in markets in the form of higher equity prices and core bond yields on Monday.
Italian bonds should feel some pressure vs Spain and Belgian ones compared to France.
Analysts
comb the data for clues to banks’ health – FT
Ramifications
of complex Asset Quality Review could take weeks or months to become clear
ECB
stress test: The data for each bank – FT
This
sortable table shows a summary of the results of the stress test, including any
shortfall after net capital raised since December 2013 is taken into account.
ECB says
banks overvalued assets by €48bn – FT
Roman
bankers protest at stress test results – FT
Analysts
and investors have taken the howls of protest from Italian central bank
officials on Sunday as evidence that the European Central Bank’s health check
on the continent’s banking system is sufficiently tough.
Capital
shortfall less than expected – Danske
Bank
The result of
the ECB’s Asset Quality Review (AQR) and stress test, including the fact that 12
out of the 25 have already covered their capital shortfall, is better than
feared. Importantly, there were no major banks failing the tests. It should overall
reduce tail risk from the banking sector.
Inflation outlook that crushes all credibility of the ECB's stress test – ZH
The
Scariest Number Revealed Today: $1.114 Trillion In Eurozone Bad Debt – ZH
Statement
by the IMF Spokesman on the ECB’s Comprehensive Assessment – IMF
Another
Unbelievable Stress-Free Test; Whitewash Math and Deferred Tax Assets – Mish’s
In an
effort to fool the public into believing the latest round of bank stress tests
were actually designed to find stress, the ECB found 25 scapegoats, with the
biggest losers in Italy and Greece.
If all goes
according to plan, it may unlock some of Europe’s repressed growth, by allowing most banks to
lend more freely now that their creditworthiness has been duly checked.
Europe's
bank test celebrations mask mounting challenges – Reuters
Investors
were spared immediate pain on Sunday after the ECB's landmark banking health
check did not force massive capital hikes amongst the euro zone's top lenders. But
the sector's long-term attractiveness has been damaged by revelations of extra
non-performing loans and hidden losses that will dent future profits.
ECB List
of Failing Banks Shrinks If You Read Small Print – BB
Most of the
lenders that failed the European Central Bank’s balance-sheet test have been
let off for good behavior.
EU
Stress Test Shows How Capital Rules Give Room to Hide – BB
The EBA
used EU rules as applicable over the three-year horizon of the test. These give
national supervisors scope to allow banks to count instruments whose
eligibility as core capital will be gradually eliminated over the next four
years. Had the fully phased-in EU rules been applied, the number of failures
would have increased to 34.
ECB
Stress Test Fails To Inspire Confidence Again As Euro Stocks Slide After Early
Rally; Monte Paschi Crashes – ZH
European
Stress Test Results – Both ‘Worrying and Reassuring’ – WSJ
While no
major banks in the eurozone failed the tests, 13 of the continent’s banks were
instructed to raise capital in case they needed to ride out another economic
storm. Other big lenders cut it close, though.
The
marathon has only just begun - what will come after the stress test? – BIS
Opening
statement by Dr Andreas Dombret, Member of the Executive Board of the Deutsche
Bundesbank, at the press conference following publication of the comprehensive
assessment results, Frankfurt am Main, 26 October 2014.
Lex
Live: European banks after the AQR – FT
ECB
stress tests are not grounds for complacency – FT
Tough
New Rules Would Have Caused Ten More Stress Test Fails – WSJ
Ten more
banks would have failed stress tests performed by European supervisors if
stricter rules on the assets allowed for calculating capital buffers were
already in force.
When
Stress Tests Fail - Italian Banks Are Collapsing – ZH
European
Banks: Balance Sheet Clarity But A Cloudy Future – CFR
The asset
quality review (AQR) at the core of the exercise identified valuation problems
at 130 banks, resulting in a markdown of the balance sheet by €48 billion. The
ECB blamed poor valuation of commercial loans for much of the problem. It
further criticized national regulators for underreporting non-performing loans (NPL)
by €136 billion.
Will
Banking Union™ Finally Deliver for the Eurozone Economy? – WSJ
Now that
European authorities have completed their reviews of bank balance sheets, are
the banks ready to lend?
Comprehensive
Assessment shows broad resilience of euro area banks – Moody’s
The
ECB's Asset Quality Review: Stressful tests – The
Economist
Europe’s banks have been probed. More than
expected have been found wanting
Measure
based on market capitalisation says they are most risky
The big
question swirling around Rome and Milan in the aftermath of the stress tests is
to what degree the exercise will now trigger a round of consolidation – not
just involving MPS but also beyond, to include many of the midsized weak
Italian banks known as the “popolari”. But it is unclear whether this could
happen without the government funds to facilitate deals that Rome appears to be ruling out for now.
Bank
stress tests fail to tackle deflation spectre – FT
Economists’
criticism of the examination focused on the stress tests’ failure to consider
one of the biggest threats to the eurozone economy: the risk of a severe bout
of deflation.
Bank
shares lose early gains after ECB stress tests – FT
Alternative
stress tests find French banks are weakest in Europe – FT
Measure
based on market capitalisation says they are most risky
ECB
Stress Tests – Global
Macro Trading
Errors
Found In The ECB's "Confidence-Boosting" Stress Test – ZH
ECB
stress test a halfway house for lifting bank capital – TradingFloor
The ECB's
comprehensive assessment of banks concluded last Sunday and financial markets
will present their own estimates. Bank mergers and continued low lending is the
probable outcome, and ECB's supply of liquidity is not helping - only asset
purchases will.
ECB
stress tests vastly understate risk of deflation and leverage – The
Telegraph
Ignoring
the deflation danger for the banking systems of southern Europe has reduced the latest stress test
to another 'farce', says EU economist Philippe Legrain
Stress
tests alone will not bring the eurozone back to health – FT
Gavyn
Davies: A dysfunctional banking system should no longer be fatal for growth
Interactive:
ECB bank test results
– Reuters Graphics
Sunday
Bloody Sunday – Bruegel
A gloomy
Italian banking system which has been spared - until now - from the deeper
monitoring and restructuring that have been undergoing in Spain and other
programme countries, but at the cost of finding itself stuck in a limbo where
lack of capital (in some cases), low profitability (in general) and rising bad
loans are hindering credit and therefore further harming the potential recovery.
[video] Martin
Wolf on Europe's bank stress tests – FT
Martin Wolf
gives his verdict on whether the recent EU-wide stress tests on banks and the
asset quality review will mark a turning point in the bloc’s crisis, and
outlines what’s needed for a sustainable recovery in the eurozone
[audio] Money
talks: A mixed bill of health – The Economist
Making
sense of the comprehensive assessment – voxeu.org
The analyses
suggest possible capital shortfalls between €80 billion and more than €700 billion
depending on the model....regulatory stress test outcomes are potentially affected by the discretion
of national regulators.
AQR
research pack (registration
required) – Longroom
FT
SocGen AQR
& Stress tests in 10 slides – Time to move on
Deutsche
Bank: All major banks pass, job done
Deutsche
Bank: On to the test which matters more
Credit
Suisse: A step in the right direction
Morgan
Stanley: After the AQR – remain overweight banks
Danske
Bank: Capital shortfall less than expected
ECB
stress tests: The view of an insider – Guest post by Klaus Kastner – Yanis
Varoufakis
Anyone who
concludes that the EZ financial system is on solid grounds is living in an
illusion. The leverage of the large banks (mostly German and French) is far too
high and they are far too reliant on ‘hot money’ for their refinancing.
Whither Europe’s Banks after the Stress Test? – PIIE
The tests
underscored concerns that many banks will need more capital and a more
profitable business model to survive in the future. By itself, the
comprehensive assessment is unlikely to spur growth in the euro area, though
some financial market fragmentation should be eased.
These tests
were only the beginning of a complex process to build a banking union in the
European Union. Unlike the stress tests, the next steps in this project could
create more divisions in Europe because national parliaments will be involved at a time when
Euroskepticism is on the rise. More important, the stress tests will not have a
particular impact on Europe's main problem: tight credit conditions for households and businesses.
Without a substantial improvement in credit conditions, there cannot be a
substantial economic recovery, particularly in the eurozone periphery.
The
Stress Test Results Are In – And It’s Trebles All Round! – Alpha
Now
Our own
calculations suggest that equity-market pricing values bank assets at more than
a trillion less than their book value, an order of magnitude different from the
ECB’s estimates.
The stress
tests probably were not rigorous enough to significantly alleviate banks’
reluctance to lend more, at least not any time soon.
FINNISH
Kauppi: Pankkiunionin lähtölaukaus ammuttu – FK
Finanssialan Keskusliiton (FK) toimitusjohtaja Piia-Noora
Kauppi korostaa, että tänään julkistetut eurooppalaisten pankkien kattavan
arvioinnin tulokset ovat lähtölaukaus 4.11. toimintansa aloittavalle euroalueen
pankkiunionille. Euroopan keskuspankin (EKP) tekemä kattava arviointi vahvistaa
tiedot suomalaisten pankkien hyvästä kunnosta. Finanssivalvonta totesi syyskuun
lopulla, että Suomen pankkisektorin vakavaraisuus on vahva. Alan kannattavuus
on parantunut heikosta taloustilanteesta huolimatta.
Pankkien stressitestit julki: 25 pankkia reputti – YLE
Yhteensä 13 pankkia on reputtanut Euroopan keskuspankin
tekemät pankkien stressitestit. Kaiken kaikkiaan 25 pankilla havaittiin vajeita
pääomassa, mutta 12 pankkia on jo tehnyt asian eteen jotain, EKP kertoi
sunnuntaina.
Suomalaispankit selvisivät EKP:n testeistä kuivin jaloin
– YLE
Euroopan keskuspankin kuntotesteissä oli mukana 128 pankkia.
Suomesta mukana olivat isoimmat pankit, eli OP-Pohjola sekä Nordea ja Danske
Bank.
Urakka ohi: Pankeilta puuttuu 10 miljardia euroa – TalSa
Eurooppalaispankkien taseissa on miljardien aukko, Euroopan
keskuspankin ja pankkiviranomaisen selvitykset paljastavat, eivätkä kaikki
pankit läpäise stressitestejä. Suomalaispankit sen sijaan selviäisivät
rankemmastakin kyydistä.
Suomi-Nordea sai erikoiskohtelun – TalSa
EKP syynäsi Nordealta myös johdannaiset, toisin kuin OP-Pohjolalta
ja Danske Bankilta.
Suomalaispankkien vakavaraisuus säilyi hyvänä myös
stressiskenaariossa – FiVa
EBA:n stressitesti: Nordean asema on vahva – Nordea
OP-Pohjola-ryhmän riskinkantokyky vahva EKP:n kattavassa
arviossa – OP
Danske Bank: Stressitestillä saadaan kaikki samalle viivalle
– MTV
Rinne: Pankkien stressitestit tärkeä osa yhteisiä pelisääntöjä
– MTV
Rehn: Ongelmapankit tuskin tarvitsevat veronmaksajien apua –
MTV
Stressitestit, luotonanto ja euromaiden taloustilanne
– Roger
Wessman
Suurpankkien stressitestit taas talousteatteria – Jan
Hurri / TalSa
Euroalueen suurpankkien stressitestit olivat aiemmin silkkaa
talousfarssia. EKP on juuri saanut päätökseen entistä perusteellisemmat ja
entistä vakavammat pankkitestit. Ehkä ne eivät olleet enää farssia, mutta
talousteatteria kuitenkin. EKP:n asema esti aidosti riippumattoman ja ankaran
riskianalyysin.