BOV among banks selected for stress tests

Bank of Valletta has been named among 91 banks selected for stress tests by the European Union.

The EU last month agreed to conduct such stress tests as part of measures to restore public confidence in the banking sector.

The banks selected for the stress tests include Germany's Deutsche Bank.

The selected banks form 65 per cent of the European banking sector, the Committee of European Banking Supervisors (CEBS) said.

"The objective of the extended stress test exercise is to assess the overall resilience of the EU banking sector and the banks’ ability to absorb further possible shocks on credit and market risks, including sovereign risks, and to assess the current dependence on public support measures," CEBS said.

"The exercise is being conducted on a bank-by-bank basis using commonly agreed macroeconomic scenarios."

It said that the stress testing exercise does not provide forecasts of expected outcomes, but rather a what-if analysis aimed at supporting the supervisory assessment of the adequacy of capital of European banks.

In each EU Member State, the sample has been built by including banks, in descending order of size, so as to cover at least 50% of the national banking sector, as expressed in terms of total assets, CEBS said.