EU banks brace for health test failures | india | Hindustan Times
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EU banks brace for health test failures

india Updated: Jul 15, 2011 23:19 IST

A health check of European banks is expected to show that as many as 15 lenders need more capital to withstand a prolonged recession, with criticism growing that the tests do not encompass the impact of a Greek default. Europe's bank "stress test" will make 90 lenders reveal for the first time their profit forecasts, a breakdown of their sovereign bond holdings and funding costs, and will force the weakest to recapitalise.

Eurozone sources had said that 10 to 15 banks are likely to fail the test, with casualties expected in Spain, Greece, Germany and Portugal.

Fitch rating agency downgraded Greece's five leading banks because of strains on their cash positions and assets.

Meanwhile, the European Commission is ready to increase its contribution to Greek infrastructure projects to help restart Greece's struggling economy, a commission spokesman said on Friday.