European banks under stress (tests): Which remain the most resilient? CEPS Commentary, 11 August 2016

De Groen, Willem Pieter and Gros, Daniel. (2016) European banks under stress (tests): Which remain the most resilient? CEPS Commentary, 11 August 2016. [Policy Paper]

Abstract

The latest round of stress test conducted by the European Banking Authority for 51 large banking groups showed huge differences in the degree to which a shock, or so-called adverse scenario, would impact different banks. We find that banks with a high exposure to sovereign risk and especially those with many non-performing loans tend to be less resilient. By contrast, national factors, such as growth rates, had little impact on the outcome.

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