Financial Regulatory Forum

EU watchdogs to conduct system-wide bank stress test

By Reuters Staff
January 26, 2010

BRUSSELS, Jan 26 (Reuters) – European Union banking supervisors will again test of the banking system’s ability to withstand shocks, a top regulatory official said on Tuesday.

“For 2010 another exercise is scheduled,” Giovanni Carosio, chairman of the Committee of European Banking Supervisors (CEBS) told the European Parliament.

A stress test by CEBS last year found that the banking sector could withstand a further deterioration of economic conditions.

Carosio said CEBS will also study how draft bank capital reforms from the global Basel Committee on Banking Supervision will affect EU banks and also study the impact of alternative proposals to those put forward by Basel.

The Basel Committee is conducting an impact assessment to help it finalise a string of reforms by year end that will force banks to set aside more capital and liquidity in a bid to make taxpayer bailouts less likely in future.

“CEBS will conduct a parallel European test… extending the sample to small and domestic institutions and institutions not represented on the Basel Committee,” Carosio said.

(Writing by Huw Jones, editing by Ron Askew)

((Reuters messaging: huw.jones.reuters.com@reuters.net; + 44 207 542 3326; huw.jones@thomsonreuters.com))

Keywords: EU BANKS/

Post Your Comment

We welcome comments that advance the story through relevant opinion, anecdotes, links and data. If you see a comment that you believe is irrelevant or inappropriate, you can flag it to our editors by using the report abuse links. Views expressed in the comments do not represent those of Reuters. For more information on our comment policy, see http://blogs.reuters.com/fulldisclosure/2010/09/27/toward-a-more-thoughtful-conversation-on-stories/
  •