ECB Stress Test

A Shaky Pass for Germany's Top Banks

John Cryan, bisheriger Co-Vorstandsvorsitzender und zukünftiger Vorstandsvorsitzender der Deutschen Bank, spricht am 19.05.2016 auf der Hauptversammlung der Bank in der Festhalle in Frankfurt am Main (Hessen). Foto: Arne Dedert/dpa +++(c) dpa - Bildfunk+++
John Cryan, Deutsche Bank's CEO, has done his best to put a positive spin on the stress test results.
  • Why it matters

    Why it matters

    Even if Deutsche Bank and Commerzbank passed, their relative weakness compared to rivals could continue to cause investors anguish over the coming months.

  • Facts


    • Europe’s regulators tested how 51 banks in 14 E.U. countries would fare if faced with a severe crisis over the next three years.
    • The banks’ capital buffers fell on average from 12.6 percent to 9.2 percent across all the financial firms tested, well above the symbolic 7-percent threshold.
    • Deutsche Bank and Commerzbank recorded results well below the average, with capital buffers of 7.8 percent and 7.4 percent.
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The focus, of course, was on Italy. When Europe’s top financial regulators released the results of a much-anticipated stress test Friday night, it was the troubled Monte dei Paschi, which had just secured a government bail-out, that came in dead last among the 51 banks evaluated.

The test, conducted by the European Central Bank and European Banking Authority, examined how the continent’s top banks would fare in a severe crisis.

Germany’s embattled leading banks, Deutsche Bank and Commerzbank, didn’t get the worst scorecard in the group. But their results were well below the average across the continent. That alone is likely to keep up the pressure on their share prices.

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