Impacts Of European Bank Stress Test On Indian Markets
The results of "stress tests" on 91 European banks have been announced by the Committee of European Banking Supervisors (CEBS) on 24th, July'10. European stress test organisers have said that total of seven of 91 banks have failed the test. It shows that French Banks are the healthiest banks in Europe. However on the home turf it is unlikely to have any major impact. According to Analyst and Experts the stress test results will play their part in the Indian markets it might behave differently from the other markets. In the recent months, Indian markets have been reacting to local news.
Report says that numbers from the local markets as well as the credit policy will probably play a more important role rather the stress test. The test shows whether banks passed or failed tests requiring them to have a 6% tier one capital ratio under scenarios of worsened economic conditions. It also shows their tier one ratio under the worst of those scenarios, which included a fall in the value of sovereign bonds they hold. In an effort to calm investors' jitters over the potential impact of the euro zone debt crisis on Europe's banking system, banking regulators assessed how 91 banks across Europe would cope with another economic downturn.
Post a Comment