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Category: Banking Date: 7/26/2010
Seven banks in the European Union have failed stress tests designed to determine whether they would be able to deal with any future economic problems.
As expected, the four major UK banks, Barclays, RBS, Lloyds and HSBC, all passed the tests set by the Committee of European Banking Supervision (CEBS).
Of those banks that failed, five were from Spain: Diada, Espiga, Banca Civica, Unnim and Cajasur.
Germany's Hypo Real Estate and the Greek ATE bank were the other banks adjudged to have failed.
The CEBS said that despite failing the test scenario, it did not mean the seven banks were insolvent.
Ninety-one European institutions undertook the tests, in a move which it was also hoped would help restore investor confidence in the European banking system.
The Financial Services Authority, which carried out the tests on the four UK banks, said the exercise showed that Barclays, RBS, Lloyds and HSBC are well placed to handle further periods of economic stress, should it develop.
"As expected, the outcomes of the stresses demonstrate the preparedness and resilience of the UK banks under unlikely adverse economic scenarios," added the regulator.
"This resilience is a result of the considerable work that has been undertaken to strengthen UK banks in recent years."
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