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| Italy's Monte dei Paschi shares suspended twice after 'stress tests' | |
| (34 minutes later) | |
| Trading in shares of Italy's Monte dei Paschi bank has been suspended twice. | |
| Monte dei Paschi's shares dived 17% early on Monday after it emerged as the worst performer in official stress tests. Trading resumed later but was again halted after losses reached 20%. | |
| In all, 24 of 123 banks failed the European Banking Authority (EBA) tests, designed to find out if they could withstand another financial crisis. | In all, 24 of 123 banks failed the European Banking Authority (EBA) tests, designed to find out if they could withstand another financial crisis. |
| Share prices in most EU banks are down following publication of the results. | Share prices in most EU banks are down following publication of the results. |
| Lloyds Banking Group shares fell 2.4% after it narrowly passed the tests. | |
| All UK bank shares - Barclays, RBS, HSBC, Standard Chartered and new joiner TSB - are lower. | All UK bank shares - Barclays, RBS, HSBC, Standard Chartered and new joiner TSB - are lower. |
| Monte dei Paschi bank was founded in 1472 for the purpose of granting loans to "poor or miserable or needy persons". | Monte dei Paschi bank was founded in 1472 for the purpose of granting loans to "poor or miserable or needy persons". |
| A handful of the strongest remain higher. | A handful of the strongest remain higher. |
| Austria's Erste Bank, Raiffeisen and Germany's Commerzbank were all up 5% at the start of trading, although Commerzbank fell back to stand 1% higher. | Austria's Erste Bank, Raiffeisen and Germany's Commerzbank were all up 5% at the start of trading, although Commerzbank fell back to stand 1% higher. |
| Financial health | Financial health |
| The health check by the EBA was based on the banks' financial health at the end of 2013. | The health check by the EBA was based on the banks' financial health at the end of 2013. |
| No UK banks failed the EBA tests. Of the 24 banks that did fail, 10 of them have taken measures to bolster their balance sheets in the meantime. | No UK banks failed the EBA tests. Of the 24 banks that did fail, 10 of them have taken measures to bolster their balance sheets in the meantime. |
| There are 14 banks that still need to raise more capital. Four are Italian, two Greek, two Belgian and two more Slovenian. | There are 14 banks that still need to raise more capital. Four are Italian, two Greek, two Belgian and two more Slovenian. |
| Also on Sunday, the European Central Bank (ECB) carried out an overlapping survey of 130 eurozone banks. | Also on Sunday, the European Central Bank (ECB) carried out an overlapping survey of 130 eurozone banks. |
| The ECB said 25 banks had failed its test, but 12 of those had already taken remedial action. | The ECB said 25 banks had failed its test, but 12 of those had already taken remedial action. |
| The ECB's total is higher than the EBA's because of Spain's Liberbank, which passed the stress test but failed the ECB's Asset Quality Review. | The ECB's total is higher than the EBA's because of Spain's Liberbank, which passed the stress test but failed the ECB's Asset Quality Review. |
| Analysis: Robert Peston, Economics editor, BBC News | Analysis: Robert Peston, Economics editor, BBC News |
| Certainly this was a much more realistic evaluation than previous exercises. | Certainly this was a much more realistic evaluation than previous exercises. |
| But, again, that is not the whole story. | But, again, that is not the whole story. |
| If this exercise to rehabilitate banks had been carried out two years ago, the impact on the recovery of the eurozone might well have been quite powerful. | If this exercise to rehabilitate banks had been carried out two years ago, the impact on the recovery of the eurozone might well have been quite powerful. |
| But today the eurozone's weakness is as much about the demand for credit as the supply | But today the eurozone's weakness is as much about the demand for credit as the supply |
| It is all very well putting banks in a position to lend, but if households and businesses are reluctant to borrow, because their confidence in the future of the eurozone is shattered, then - like the proverbial gee-gee led to water - they won't drink (or borrow). | It is all very well putting banks in a position to lend, but if households and businesses are reluctant to borrow, because their confidence in the future of the eurozone is shattered, then - like the proverbial gee-gee led to water - they won't drink (or borrow). |
| Read Robert's blog in full | Read Robert's blog in full |