Bank bonus

After the Stress Tests, Relax a Little

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The European Central Bank's stress tests have been an illuminating experience.
  • Why it matters

    Why it matters

    The backing of figures such as the head of the Finnish Central Bank lends credibility to the process and results of the ECB stress tests.

  • Facts


    • The ECB stress tests found that all euro-zone banks are, or will soon be, financially stable.
    • Euro-zone banks have raised more than €200 billion ($249 billion) to improve their balance sheets.
    • The banks are still shouldering defaulted loans worth €879 billion.
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The European Central Bank has successfully completed its comprehensive bank stress tests, designed to weed out vulnerable banks before it took responsibility for their supervision. The results show that a large majority of institutions are resistant to a worsening of the global economic situation, as well as turbulence in the financial markets.

It also became clear that the 25 banks who proved to have too small a capital cushion will be able to accommodate this point of weakness, or will address the capital shortfall before the year ends.

The stress tests awakened high expectations. Most observers believe that the process was conducted in a credible manner. The banks began preparations at the end of 2013, shortly after the announcement of the monitoring. Since then, they have come up with more than €200 billion ($249 billion) in order to improve their balance sheets: they have increased their capital, expanded the share of less risky assets and reduced their debts.


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