Monday , November 30 2020

British banks in stress tests / Norm LSM.LV



The British banks have shown the worst results in recent European bank stress tests. German and Italian banks are also struggling. The European Banking Supervisor has developed a test scenario that will last until 2020 with the economic downturn of the European Union (EU).

European Banking Supervisor conducted this stress test in January-October and examined 48 European European banks. There were no Latvian banks among them. The scenario suggested that Breck was one of the driving forces or a severe recession in the UK with a fall below 8%.

Generally, since 2008, the stress of banks has improved, but most European banks are the worst for British people –

Lloyd & Barclay, Banks and Royal Bank of Scotland. The Bank Stress scenario also predicted the worst situation in the UK economy. However, German Deutche Bank and several regional banks are facing severe consequences, for example, in the worst case scenarios, stop paying dividends and instead increase capital adequacy.

According to some bank analysts, Italian banks have shown relatively good results. However, there are no recent cases in the Italian economy.

None of the banks passed through a stress test. The former stress test was conducted two years ago and at present the banks seem to be resistant to macroeconomic shocks.

The results of this test will help the bank supervisor to make a decision to demand that banks increase their capital adequacy to protect them from potential losses.


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