Analysts: Banks stress tests 'insufficient'

The European Banking Authority (EBA) will post the results of stress tests on 90 European banks today, amid criticism from analysts the tests will fail to detail banks' weaknesses.

The healthcheck aims to gauge banks' capital resilience in an economic crisis, but analysts said tests will not be strict enough to demonstrate their actual health after they failed last year to estimate the strength of Irish banks. Only seven out of 91 banks failed tests in 2010, while Allied Irish Bank (AIB) required a government bailout short after the EBA had given it a clean bill of health, the BBC reports. Meanwhile, Standard & Poor's said a "moderately harsher scenario" would have lent more credibility to the tests in assessing the strength of the banking sector. A note said...