European Central Bank. Picture: EPA/BORIS ROESSLER
European Central Bank. Picture: EPA/BORIS ROESSLER

 There was no automatic link between European banks’ stress test results and their capital requirements, a European Central Bank spokesperson said on Wednesday, after the ECB’s second-in-command last week suggested a dozen lenders raise more capital.

ECB vice-president Luis De Guindos said last Monday that the 12 eurozone banks  with capital worth less than 9%  of their risky assets in the latest health checks “should increase robustness and enhance capital positions”.

The prospect of higher capital demands put analysts on alert with banking shares battered, the eurozone economy slowing and financial markets  volatile.

But the ECB spokesperson said the test results would only be used on a “case-by-case” basis by its banking watchdogs.

“The individual bank results of the stress test are taken into account by microprudential supervision in its regular supervisory process, so only case-by-case,” the spokesperson said. “There is no automatism.”

The case laid bare new differences between the Single Supervisory Mechanism (SSM), which oversees banks, and the ECB’s department in charge of financial stability, now headed by De Guindos.

Under his predecessor, Vitor Constancio, the two arms differed on issues such as unpaid bank loans, the treatment of sovereign debt and convertible bank bonds.

“As an institution with multiple functions, we also look at the stress test from a macro-prudential perspective which considers [the] financial stability of the whole industry," the spokesperson added.

Germany’s Deutsche Bank and France’s Societe Generale and BNP Paribas alone would, Reuters calculates, have to raise altogether €11bn if they were asked to meet De Guindos' informal threshold.

De Guindos, who joined the ECB’s board in June after leaving his job as Spain’s finance minister, is seen a candidate to replace Sabine Lautenschlaeger as vice- chair of the SSM when her term runs out early.