Association of German Banks: 2011 stress tests much tougher than last year’s

17 March 2011 – The Association of German Banks regards the EU-wide bank stress test scenario as appropriate. “The benchmark is higher in many respects than last year”, said Michael Kemmer, the Association’s General Manager. “The criteria have been toughened considerably in some cases, and that is a good thing.” The Association welcomes it that the resilience of the EU banking system is regularly measured by the European Banking Authority (EBA) by means of stress tests.

At the same time, the results should not be overrated. “The stress tests give supervisors important information about the banking system, but they don’t say whether individual banks have a sustainable business model,” Mr Kemmer added. Their disclosure therefore had to be prepared very carefully to avoid producing unwanted side-effects. “We should thoroughly analyse the results and examine which measures are necessary on a case-by-case basis.” As the stress test scenario was a hypothetical one, it would, however, be fundamentally wrong if the results were to automatically trigger action resulting in higher capital requirements for banks.

Association of German Banks
Press and Communications
Tel.: +49 30 1663 1201 - 1204
Fax: + 49 30 1663 1298
pressoffice@bdb.de