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| Twenty-four European banks fail EBA stress test | |
| (35 minutes later) | |
| Twenty-four European banks have failed stress tests of their finances, the European Banking Authority has announced. | Twenty-four European banks have failed stress tests of their finances, the European Banking Authority has announced. |
| The banks now have nine months to shore up their finances or risk being shut down. | The banks now have nine months to shore up their finances or risk being shut down. |
| They include nine Italian banks, three Greek banks and three Cypriot banks. | |
| The health check was carried out on 123 EU banks by the EBA to determine whether they could withstand another financial crisis. | The health check was carried out on 123 EU banks by the EBA to determine whether they could withstand another financial crisis. |
| The review was based on the banks' financial health at the end of 2013. | The review was based on the banks' financial health at the end of 2013. |
| Ten of them have taken measures to bolster their balance sheets in the meantime. All the remaining 14 banks are in the eurozone. | |
| The worst affected was Italian bank Monte dei Paschi, which had a capital shortfall of €2.1bn (£1.65bn, $2.6bn). | |
| BBC World Service economic correspondent Andrew Walker says concerns about banks were a central element in the eurozone financial crisis and in some countries, their weakness remains a factor holding back economic growth. | |
| 'Robust' exercise | |
| Four UK banks were subjected to the EBA test: Royal Bank of Scotland, HSBC, Lloyds Banking Group and Barclays. | |
| None of them failed the test, but Lloyds passed narrowly, with capital under adverse scenarios of 6.2%, not far from the 5.5% benchmark. | |
| At the same time, the European Central Bank (ECB) carried out an overlapping survey of 130 banks. | |
| The ECB said 25 banks had failed its test, but 12 of those had already taken remedial action. | |
| The European Commission welcomed the results of the EBA and ECB assessments. | |
| It said they had been "robust exercises, unprecedented in scale and among the most stringent worldwide". | |
| "Yet there is no room for complacency," the Commission said in a statement. | |
| "Rigorous and timely follow-up actions to the results of the exercises will be absolutely crucial," it added. | |
| Analysts said the results of the tests were much as expected. "The first impression is that there are few surprises," said Max Anderl of UBS Global Asset Management. | |
| "The document refers to many of the 'usual suspects', mainly in Greece, Portugal and Italy," he added. |