European banks have passed the tests of strength by Moody's. The rating agency has increased the stress tests to thirty European banks from ten countries and has concluded they have a level of capital sufficient to take further losses. The concerns related in particular to the ability of these institutions to cover potential losses on public and private claims in Greece, Portugal, Spain and Ireland."On the basis of stress tests that we conducted, we believe that these banks would be able to absorb losses that may result from their exposures (to the debt of the countries mentioned) without having to increase their capital even if a scenario worse than expected losses, "says one of the authors of the report.
The ECB guarantor
Moreover, banks can rely on the intervention of the European Central Bank (ECB) has decided to buy bonds of countries in fiscal drift, said Moody's. As for credit claims in these four countries, the agency notes that potential losses on these assets are also supportable by banks.The agency explains that these losses would occur over several years, and they would likely be offset by revenues.
French banks in the viewfinder
The concerns were foremost on the ability of French banks to cope with new claims. Indeed, the French institutions are most involved in Greece, which crystallizes the deepest fears. In the country, their claims reached $ 53 billion.