On paper, all of Germany’s major banks have been given a clean bill of health by the European Central Bank, which last month completed an invasive scrutiny of Europe’s largest banks. None of the 24 German banks that were subjected to the ECB’s “stress test” are currently being required to raise additional funds.
But for at least one German bank however, the “pass” grade from the ECB was something of an illusion.
HSH Nordbank, a state-owned lender that ran into trouble by financing the global shipping industry ahead of the 2008 financial crisis, just barely scraped through the central bank’s test. Many had thought it would in fact fail. The nail-biting result called for a glass of champagne and illicited some surprise.