ECB Bank Stress Tests Pressure Stock Markets

Bank shares across Europe have fallen after details of planned healthchecks on the top lenders were unveiled.

The European Central Bank, which takes over supervision of leading eurozone banks next year, said the stress tests would unearth potential risks.

Banks with capital shortfalls may be required to bolster their balance sheets, the ECB said.

The Euro Stoxx index of big eurozone banks was down more than 2.5% in late morning trading.

ECB president Mario Draghi said: “A single comprehensive assessment, uniformly applied to all significant banks, accounting for about 85% of the euro area banking system, is an important step forward for Europe and for the future of the euro area economy.

“We expect that this assessment will strengthen private sector confidence in the soundness of euro area banks and in the quality of their balance sheets,” he said.

The exercise will start next month, and will take about 12 months. The ECB said the aim was to “foster transparency, to repair and to build confidence”.

via BBC

Content is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Business Information & Services, Inc. or any of its affiliates, subsidiaries, officers or directors. If you would like to reproduce or redistribute any of the content found on MarketPulse, an award winning forex, commodities and global indices analysis and news site service produced by OANDA Business Information & Services, Inc., please access the RSS feed or contact us at info@marketpulse.com. Visit https://www.marketpulse.com/ to find out more about the beat of the global markets. © 2023 OANDA Business Information & Services Inc.