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ECB Finds $1.87 Billion Capital Gap in Stress Test of Nine Banks 

November 16, 2015

Jeff Black, Bloomberg Business

The European Central Bank found capital gaps totaling 1.74 billion euros ($1.87 billion) among nine lenders it tested, with the biggest hole at Portugal’s Novo Banco SA.

“Shortfalls amount to 1.74 billion euros resulting from CET1 ratios falling below the threshold of 5.5 percent in the adverse stress-test scenario, after including impact of asset quality review,” the ECB said in a statement on its website on Saturday. “Banks will be required to address remaining shortfalls in a timely manner by issuing capital instruments or undertaking other eligible measures to restore their capital positions to the required levels.”

The participating banks were Banque Degroof SA, Agence Française de Développement, J.P. Morgan Bank Luxembourg SA, Mediterranean Bank Plc, Sberbank Europe AG, VTB Bank (Austria) AG, UniCredit Banka Slovenija dd, Kuntarahoitus Oyj Plc, and Novo Banco.

Four of the five banks at which shortfalls were identified have already covered the gaps by measures including capital raising, the ECB said. They were AFD, Mediterranean Bank, Sberbank and VTB. Read more

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