The bank stress test is not a free ticket

by time news

BerlinWhile bank stress tests were still wildly discussed ten years ago, the industry has now got used to the endurance tests with which the financial supervisory authority regularly checks institutions for their resilience. Prior to the publication of the latest stress test by the European financial regulator, one topic in particular was discussed in banks: to what extent the results could affect the issue of dividend payments. The financial industry has been understanding each other over the Corona mountain for a while. Euroland banks are therefore longing for the end of the dividend moratorium imposed with the beginning of the pandemic in March 2020, after those distributions to their shareholders have been suspended since then.

With the bank stress test, the European Banking Authority (EBA) and the European Central Bank (ECB) have the 50 most important European credit institutions calculate the consequences of a collapse in the economy and a drop in property and share prices. The results of the latest analysis showed that most of the major European banks are currently equipped for a further economic downturn after the Corona crisis. Overall, the institutes performed slightly better than during the test in 2018, although the scenarios to be calculated in the test were more stringent.

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