Severe Covid recession could topple some EU banks
One-quarter of lenders would see CET1 ratios fall below 6.8%
A handful of European lenders would see their core capital ratios fall below regulatory minimums under a prolonged coronavirus-induced recession, a new stress test by the European Central Bank (ECB) shows.
The so-called vulnerability analysis tested 86 top banks against three scenarios: one based on the European Banking Authority’s (EBA) 2020 baseline stress test scenario, and two calibrated for the Covid-19 crisis. In the worst-case Covid-19 scenario, eurozone GDP is estimated to decline a
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