According to information from the European Central Bank 13 banks failed the stress test, which assessed the capital buffers of the banks through an in-depth review of their finances. This test was carried out as part of a regulatory effort aimed at assessing the health of European banks. The aim of the test is to strengthen the banking system, in order for the banks to be able to provide more credits to companies, and to stimulate the European economy that has been suffering since the global economic crisis started in 2008. The stress test involved a simulation of how the financial situation would affect the banks in a scenario of economic distress.
The ECB found that 25 out of 130 tested banks did not have sufficient buffers. However, 12 of these have already taken appropriate measures and strengthened their capital buffer by 15 billion euros. The other 13 banks now have to come up with a plan in the next two weeks on how to increase the buffer against losses, and they have between 6 to 9 months to close those gaps.
9 of the twelve financial institutions that failed the ECB stress test are based in Italy, which had by far the worst results. But also Greece and Cyprus, as well as Slovenia and Belgium have to improve their capital buffer. Banks of the northern countries, the UK, Germany, France, Poland, Austria and Spain showed overall very good results.
The Bank of Valletta and HSBC Malta passed the test. HSBC Malta had been tested as part of the main holding company HSBC UK, and they passed with flying colours. John Cassar White, the Chairman of BOV, was satisfied with the result and said that it confirms the resilience of the bank in a simulated situation of stress. He also noted that the result will boost the market confidence in the stability and strength not only of the Bank of Valletta, but that of the entire financial system in Malta.
BOV, HSBC Malta and Banif are, for example, great choices for a business bank account in Malta, and recommended by the office of Dr. Werner & Partner.
