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Eight out
of 90 European banks have failed stress tests designed to ensure they could
withstand another financial crisis.
Banks both inside and outside the eurozone were tested. |
The
European Banking Authority (EBA), which carried out the healtcheck, said
another 16 banks were in the danger zone.
The EBA
called on national financial regulators to ensure that capital shortfalls would
be quickly resolved.
Five
Spanish banks failed, as well as two in Austria and one in Greece.
The failed
banks will be named shortly.
The EBA
added that another 16 banks only just passed the tests. All the banks will face
pressure to strengthen their finances.
The news
came just as Italy's parliament approved a 70bn euro austerity package. The
country's central bank said that all Italian banks had passed the tests with
"an ample margin".
The tests
are a key element in fighting Europe's debt crisis to identify weak banks and
ensure they are made robust enough to survive a possible default on government
bonds heavily indebted countries such as Greece.
There have
been concerns, including from the ratings agency Standard & Poors, that the
tests were not strict enough. However, the EBA said they were more stringent
than those it carried out last year.
In 2010,
both Irish banks tested, Bank of Ireland and Allied Irish Bank, were given a
clean bill of health. But just months later, AIB needed a government bail-out.
On
Wednesday, German bank Helaba said it expected to pull out of the stress tests
to avoid public failure.
It said it
would have passed the test if regulators counted a debt-equity hybrid, called
"silent participation", as a capital reserve, but the EBA, having
initially said it would accept this, then changed its mind.
The bank
said it was not allowing the EBA to publish its data and therefore expected to
be excluded from the tests.
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