WORLD
Eight banks fail EU stress test with 16 in danger zone
Baku , July 16 (AZERTAC). Eight out of 90 European banks have failed stress tests designed to ensure they can withstand another financial crisis.
The European Banking Authority (EBA), which carried out the healthcheck, said another 16 banks were in the danger zone.
The EBA called on national financial regulators to ensure that capital shortfalls would be quickly resolved.
Five Spanish banks failed, as well as one in Austria and two in Greece.
On Wednesday, Germany`s Helaba pulled out of the stress tests, effectively making it the ninth bank to fail.
In Austria, the Oestereichische Volksbank failed the test, while in Greece two state-controlled banks - ATEbank and EFG Eurobank - fell at the hurdle.
In Spain, Catalunya Caixa, Pastor, Unnim, Caja3 and CAM failed, with seven others just scraping through the test.
However, Bank of Spain governor Miguel Angel Fernandez Ordonez said there was no need to inject further capital into the banks as the sector was already undergoing a fundamental restructuring.
The EBA added that 16 banks only just passed the tests. All the banks should "promptly" take steps to strengthen their financial cushion, the EBA said.
After the EBA announcement, the Bank of Portugal said two of the country`s banks would immediately begin bolstering their finances.
Banco Comercial Portugues, the country`s largest listed bank, and Espirito Santo Financial Group, will strengthen their balance sheets within three months.
Debt-heavy Portugal took a 78bn euro (£68bn) bail-out earlier this year. Its economy is forecast to contract 4% over the next two years.
The news came just as Italy`s parliament approved a 70bn euro austerity package. The country`s central bank said that all Italian banks had passed the tests with "an ample margin".
A key benchmark for passing the test was whether the banks have at least 5% "core tier 1" capital, which describes the best form of capital a bank can hold to make up any losses.