Stress tests set to clear UK and Italian banks
Italian and British banks will come through European stress tests without needing to raise new capital, top officials said yesterday.
“The tests on Italian banks will obviously present diverse results but I am confident that they will show that the capital resources of the single banks are adequate,” said Bank of Italy Governor and European Central Bank member Mario Draghi.
Chancellor George Osborne said UK banks would not need any government help to shore up their financial position after the tests are released on 23 July. Osborne said it was important to reassure markets with the tests on 91 banks designed to provide a health check on the industry and that there is “a plan to stand behind any banks that don’t meet them”.
ABanks will be assessed on how well they can withstand another economic downturn and losses on Greek and some other government bonds, and whether they need to raise capital.