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European bank stress tests produce 7 failures

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European bank stress tests produce 7 failures


The test results have been released which were carried out to see how European banks would cope with a future financial crisis.

Of the 91 institutions that were subjected to so-called stress tests, seven failed meaning that they will have to raise more capital.

The Committee of European Bank Supervisors which organised the tests said those banks had a capital shortfall of 3.5 billion euros.

Five of Spain’s smaller regional lenders, known as cajas, failed the test and their recapitalisation is likely to speed a restructuring of the troubled sector.

Banks in Germany and Greece were also seen as weak spots and in need of restructuring, but state-owned Hypo Real Estate was the only German lender to not pass and state-controlled ATEbank was the only Greek bank to not make the cut.

As expected, no big banks failed.

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