Newsletter October 09: EU banks’ stress tests reveal resilience

LONDON – Stress tests applied to 22 major European cross-border banking groups indicate that their aggregate Tier 1 capital ratios will be well above 9%, under a baseline scenario, reflecting current macro-economic projections. This compares with the 4% Tier 1 minimum capital ratio set under the Basel international accords. However, should economic conditions be more adverse than currently expected, this would have a significant impact on the potential losses of the banks concerned.