The health of Europe’s banks will come under scrutiny again later, when the results of EU-wide bank stress tests – designed to assess whether banks will be able to survive future economic shocks – are published in a move designed to reassure investors over the health of Europe’s financial sectors. In all,
91 European banks were tested.
The FSA has said it expects the four major UK banks, RBS, Lloyds, HSBC and Barclays, to pass the tests whilst Spanish regional lenders are a cause for concern and have failed. This is due to their making heavy losses following the collapse of property market in Spain. Pedro Swartz, professor of economics at Madrid’s San Pablo University, stated that it was widely known that some of the country’s smaller banks would fail.