EU publishes stress test details

The committee subjecting some of Europe's biggest banks to continent-wide stress tests has widened the factors aimed at determining their financial resilience to future shocks and credit risks.

The tests would assume for their "adverse scenario" economic output that is 3 per centage points less than European Union estimates over a two-year period, the Committee of European Banking Supervisors said yesterday. "The sovereign risk shock in the EU represents a deterioration of market conditions as compared to the situation observed in early May 2010," Cebs said in a statement yesterday.

The results, which are to be published on 23 July, will cover 91 banks in Europe – including RBS, HSBC, Barclays and Lloyds in the UK – which represent 65 per cent of the European banking sector.