Spain calls on European Banking Authority to ditch new tests

 

Spain, along with France and Germany, is calling upon the European Commission not to go ahead with proposals for tougher stress tests on European banks.

El Pais reports that as many as 14 Spanish Banks and Cajas would fail the proposed test under the new criteria which the European Banking Authority is proposing. The proposed tests would require a 7% tier 1 capital ratio with the European economy in recession and the value of sovereign debt holdings written down.

The European Banking authority may even increase the capital requirement to 9%, the newspaper added, which would see the majority of Spanish Banks failing the test.