All of Germany’s largest banks except for one – state-backed HSH Nordbank – are expected to narrowly pass a comprehensive “stress test” of their financial health that is being carried out by the European Central Bank, according to banking sources.
Commerzbank, Germany’s second-largest bank and one-time industry problem child, should be in the clear, according to sources in the financial sector.
The ECB’s examination of the 130 biggest banks in the euro zone – including 21 in Germany – is designed to put doubts aside once and for all about the health of Europe’s financial system. The results, which have been hotly anticipated by the global financial community for months, will be released on October 26, the ECB announced Friday.
The ECB’s stress test was a big topic among the bankers at the International Institute of Finance, a global banking lobby, which hosted an annual gathering in Washington at the weekend. How hard should the test be? Getting the balance right is critical for restoring confidence in Europe’s financial sector.