The results from the EU’s stress tests on its banks are being seen as positive, even if doubts about the rigour of them have been expressed.
The London-based Committee of European Bank Supervisors only found a three and a half billion euro hole between the seven banks that failed, out of the 91 tested. That is a much better than expected result. Critics say that is because the tests were not tough enough.
One German bank failed, and mighty Postbank only scraped through. The acid test of this exercise will be whether or not money flows back into the system.
Financial analyst Oliver Roth said: “The results of these stress tests are positive but not surprisingly positive. If you look closely, you can see that this is a politically-motivated image campaign for the banks to regain investor confidence.”
Spain suffered the most with five smaller regional banks going down. However, restructuring them would cost less than two billion euros, so Madrid was happy.
“For the government, the result is satisfying and shows that our financial system has really stood up well to the effects of the crisis,” said Elena Salgado, Spain’s Minister of Economy and Finance.
Greece, where the eurozone’s problems all started, had only one failure.
The CEBS insists its tests are tougher than the USA’s.