The 2010 European Union bank stress test
What was the 2010 European Union bank stress test?
It was an exercise held in the wake of the financial crisis to assess the strength, or otherwise, of banks in the European Union should there be a return to crisis conditions. Seven out of the 90 banks tested were found to have inadequate capital.
Where have you heard about the 2010 European Union bank stress test?
As an investor, you may have seen it or subsequent tests referred to in the annual reports or other documentation of institutions whose shares you hold. Accounts of the financial crisis and its aftermath in Europe may also refer to the 2010 test.
What you need to know about the 2010 European Union bank stress test.
The test was administered by the Committee of European Banking Supervisors (CEBS), initially set up in 2004 as an advisory body but whose powers were increased in the wake of the crisis. According to the CEBS: "The overall objective of the 2010 exercise is to provide policy information for assessing the resilience of the EU banking system to possible adverse economic developments and to assess the ability of banks...to absorb possible shocks on credit and market risks." Of the seven banks that failed, five were in Spain, one in Germany and one in Greece.