Barclays and Lloyds the surprise laggards in EU bank health check
Britain’s Barclays and Lloyds were the surprise laggards in a EU bank health check on Friday, though none of the 48 lenders tested failed a major capital threshold. The EU’s banking watchdog published results on Friday for its toughest “stress test” since 2009, when it began the exercise to identify capital holes and avoid any repeat of the government bailouts triggered by the 2008 financial crisis. The latest test measured banks’ ability to withstand theoretical market shocks such as a rise in political uncertainty against a backdrop of plunging economic growth, a disorderly Brexit or a sell-off in government bonds and property. While there was no pass or fail, banks unable to complete the “adverse” or toughest part of the test without preserving a capital ratio of well above 5.5% could be forced by regulators to raise more capital, sell risky assets or curb their dividends.
None of the banks tested in the health check by the European Banking Authority (EBA) dropped below the...
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