The Financial Times reports that senior bankers and regulators from across Europe have expressed deepening concerns that the stress test exercise of 91 banks will produce a skewed league table of institutions based on misinformed comparisons of financial strength.
Board members at four of the continent’s biggest banks – in the UK, France and Germany – said on condition of anonymity that they had grave reservations about the way in which the exercise had been conducted and were worried the markets would misinterpret the outcome.
The banks in question are generally recognised to be among those that will pass the test.
“It is not a question of whether we will pass,” said one finance director. “It is that the market will compare our stressed capital ratio with others that have been calculated in an entirely different but untransparent way.”
Bankers and analysts expect between 10 and 20 institutions to fail, many of them among the public sector cajas in Spain and Landesbanken in Germany.
© Financial Times
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