PressTV... The European Central Bank says one in five Eurozone banks is grappling with financial problems with Italy's banks hit hardest by the ongoing crisis.
The ECB said on Sunday that 13 of Europe's top banks have failed an in-depth review of their finances and need to increase their capital buffers against losses by 10 billion euros (USD 12.5 billion).
"A total of 25 billion capital shortfalls were identified across 25 participating banks as a joint result of the AQR (Asset Quality Review) and the stress test," ECB Vice President Vitor Constancio said, adding, "Out of the 25, 12 banks have already taken measures in 2014 that are enough to cover their shortfall.”
“There are then 13 banks that still have either to exactly apply their restructuring downsize as it is foreseen in their plans with the European Commission, or they will have to come up with ways to increase their capital," he added.
Constancio made the statement based on a crunch audit aimed at preventing a repeat of the financial crisis that nearly led to the euro’s collapse.
The ECB, however, said 25 banks still need 25 billion euros to guarantee themselves against any future crises.
The worst results were seen in Italy, where nine banks failed, as well as in Greece and Cyprus with three each.
Even Germany, which has been doing well with exports, is witnessing a slowing growth on the back of weak investment.
The ECB has been criticized for similar stress tests, carried out by the EU in 2010 and 2011, which gave a pass to banks that later needed bailouts.
DB/NT/SS