Full scope of Europe’s bank stress tests revealed - futures io
futures io

Full scope of Europe’s bank stress tests revealed

Discussion in Traders Hideout

    1. trending_up 428 views
    2. thumb_up 0 thanks given
    3. group 0 followers
    1. forum 0 posts
    2. attach_file 0 attachments

Welcome to futures io: the largest futures trading community on the planet, with well over 125,000 members
  • Genuine reviews from real traders, not fake reviews from stealth vendors
  • Quality education from leading professional traders
  • We are a friendly, helpful, and positive community
  • We do not tolerate rude behavior, trolling, or vendors advertising in posts
  • We are here to help, just let us know what you need
You'll need to register in order to view the content of the threads and start contributing to our community.  It's free and simple.

-- Big Mike, Site Administrator

(If you already have an account, login at the top of the page)

Search this Thread

Full scope of Europe’s bank stress tests revealed

(login for full post details)
  #1 (permalink)
Aurora, Il USA
Experience: Advanced
Platform: TradeStation
Trading: futures
kbit's Avatar
Posts: 5,902 since Nov 2010
Thanks: 3,294 given, 3,360 received

European regulators unveiled more details of the hotly-anticipated banking stress tests on Wednesday, in an effort to strengthen the region's shaky financial sector.

In its final templates of the stress tests, the European Union's (EU) European Banking Authority (EBA) revealed what information would be published about each bank.

The region's 124 most important banks are undergoing an assessment of their risky assets designed to determine how well they would cope with future market shocks.

Banks' composition of capital, risk weighted assets and profit and loss figures will be disclosed, along with their exposure to sovereigns, credit risk and securitization, the EBA said. Up to 12,000 data points will be published about each bank.

It also revealed that, for the first time, what's known as a bank's "fully-loaded" common equity tier 1 capital ratio would be published.

The common equity tier 1 capital ratio measures a lender's core equity capital against its risk-weighted assets and is a key measure of a bank's ability to withstand economic shocks. This "fully-loaded" ratio is designed to provide a comparable measure across the EU, to avoid reporting discrepancies in different countries.

Europe's banks have been at the heart of the euro zone's financial crisis, after taking on too much debt which turned toxic when borrowers struggled with their repayments. A number of European governments were forced to step in and rescue their struggling institutions – deemed in many cases "too big to fail" – which in turn hit the solvency of these already debt-laden countries.

The stress tests, which will be finalized later this year, form a crucial part of the EU's efforts to prevent this from happening again.

"By disclosing data in a consistent and comparable way across the Single Market, the EBA will bring greater transparency to EU banks, contributing to enhanced market discipline of the entire EU banking sector," the EBA said in a press release.

It added that its overview – as a result of the data from the stress tests – means it will be able to "promptly flag any issues or statistical differences to national supervisors, whilst also allowing public disclosure of all data on EU banks."

These additional details of the stress tests come just weeks after Portugal was forced to stump up close to $5 billion euros to save its lender Banco Espirito Santo.

Troubles at the bank – which is Portugal's largest listed by assets – saw equity markets slump around the world for a short period of time in June, further emphasizing the global importance of Europe's financial system.

The EBA is expected to publish the final results of this year's EU-wide stress test in October 2014.

Full scope of Europe?s bank stress tests revealed

Started this thread Reply With Quote

futures io Trading Community Traders Hideout > Full scope of Europe’s bank stress tests revealed

Last Updated on August 20, 2014

Upcoming Webinars and Events

NinjaTrader Indicator Challenge!


The Cold Hard Truth: Maybe I Am Not Good Enough w/Chris Gray @ Earn2Trade

Elite only

HIRO Indicator by Spotgamma in Bookmap w/Brent Kochuba @ SpotGamma

Elite only

NEW BlackBird Features + FOREX Support w/Jeremy Tang @ SharkIndicators

Elite only

Copyright © 2021 by futures io, s.a., Av Ricardo J. Alfaro, Century Tower, Panama, Ph: +507 833-9432 (Panama and Intl), +1 888-312-3001 (USA and Canada), info@futures.io
All information is for educational use only and is not investment advice.
There is a substantial risk of loss in trading commodity futures, stocks, options and foreign exchange products. Past performance is not indicative of future results.
no new posts