The European Banking Authority (EBA) wants banks to hold a minimum core Tier One ratio of seven per cent under a recession scenario, and those who fail will be asked to bolster their capital position, two banking sources told Reuters.
The data was requested on Friday and banks have been asked to submit it by the end of Tuesday, three sources said. The data is based on the end of June.
"A significant number of banks are expected to fail the stress tests," one of these sources said.
A "stress test" of 90 banks run by the EBA this summer was criticised for not being tough enough. It required core capital of 5 percent to be held, but did not apply severe losses on holdings of Greek and other sovereign debt. The current test is expected to mark peripheral euro zone debt to market prices.
Using a seven per cent pass mark, previous stress test data, and current market prices for sovereign bonds, some 48 banks would fail the test and need to raise a total of 99 billion euros, according to Reuters Breakingviews data. Only eight banks had failed the test in July.
Greek banks would be hardest hit and National Bank of Greece, Eurobank and the other four top lenders could need over 30 billion euros under the tougher scenario.
Based on the end-2010 data, used in the most recent stress tests, other banks that would need capital include Royal Bank of Scotland, Commerzbank, Societe Generale, Deutsche Bank and Unicredit.