CEBS's bank stress tests

23 July 2010 - Statement by Manfred Weber, Chief Executive of the Association of German Banks, on the results published today of CEBS's bank stress tests.

"Today's results show that the European banking system is in better shape and more resistant to crises than was anticipated in some circles. Overall, the German banks performed well. The government debt crisis experienced by some euro countries in May, combined with a banking system still weakened as a result of the financial and economic crisis, had given rise to considerable uncertainty in the markets. By publishing the findings of stress testing for the first time, supervisors have now created more transparency, which will ultimately help to calm the markets and restore confidence.

But the results need to be interpreted with care. A stress test is only a model calculation for a specific assumed scenario. It cannot provide a forecast of how an individual bank, let alone an industry, will develop.

CEBS’s stress tests were rigorous and by no means “lax or undemanding”. The scenario on which they were based – Europe’s relapse into recession and not insignificant losses in the government bond markets – was extremely severe. Any bank which passed has demonstrated its resilience. Any bank which failed to pass now has a chance, and indeed a responsibility, to remedy its shortcomings so that it will be better prepared for stress situations in the future."

 
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