The European Banking Authority published the results of its latest, much-anticipated stress tests on Friday evening, detailing how well Europe’s lenders would be able to cope with a significant adverse shock to the economy.
While — unlike previous incarnations — the EBA did not include a pass/fail designation in their findings, the results still shed some interesting light on how well placed Europe’s banks are in terms of capital requirements.
The headline reading from the EBA is that Monte dei Paschi di Siena, Italy’s third largest lender and the world’s oldest bank was the only lender to have a key capital ratio — the so-called fully loaded common equity tier one (CET1) ratio — in negative territory.
However, while Monte dei Paschi was clearly the worst performer (as had been expected) the test also shone a light on the relatively weak capital position of some of the continent’s lenders, including Deutsche Bank, which has come under substantial pressure in recent months.
Included within the report was a brief summary, in chart form, of how the 51 banks tested by the EBA fared in terms of their capital ratios. Take a look at the chart below — we’ve highlighted some of the key lenders: