Most European banks have enough capital to weather a financial storm, regulators said on Sunday, aiming to reassure investors that the lenders are back on a solid footing after the crisis in the recent past.
Unveiling the results of a nearly year-long effort to assess the finances of the region’s banks, the European Central Bank and the European Banking Authority said all but 13 of the continent’s leading banks have enough capital, the Wall Street Journal reported.
The 13 banks need to come up with a total of 9.5 billion euros (US$12.04 billion) in extra capital, the report said. Meanwhile, a total of 25 banks technically failed the “stress tests,” facing a cumulative shortfall of 24.6 billion euros, but most have already taken steps to solve their problems, regulators were quoted as saying.
Failures were concentrated among Italian banks, with nine lenders falling short, going by their end-2013 results.
Apart from Italy, Cypriot and Greek banks fared poorly in the tests, with three failures each.
Banks that received failing marks, and which haven’t already filled their capital holes, now have two weeks to explain to regulators how they plan to overcome the deficits.
They will then have up to nine months to implement those plans, according to the report.
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