It sounds bad. Twenty-five of Europe’s 130 biggest banks failing ECB stress tests on capital reserves in cases of simulated market shocks in 2013.
However, half of those 25 banks have resolved those problems already, and Europe’s three biggest economies had not a failure between them. The other banks have until the end of next year to get out of trouble.
Two Italian banks, including Monte dei Paschi remain in intensive care, but one expert says Italy could have been much worse.
“We think that the comprehensive assessment outcome has confirmed the robustness and the soundness of the Italian banking sector, because if you add the stress test scenario to what has already occurred in the Italian economy, you have five consecutive years of recessions…Notwithstanding this extreme scenario, only two banks failed the test,” says the Director General of the Italian Association of Banks Giovanni Sabatini.
Cyprus and Greece also suffered with three bank failures each, but the Greeks are back