ECB to stress test US banks
A handful of global banks are bracing themselves for their first results from Europe's bank stress-testing regime, which will tell them in October whether they have enough capital to withstand future crises.
Banks outside the European Union have traditionally been outside the scope of EU stress tests, but the European Central Bank (ECB) told Reuters it will also run its own stress tests on local subsidiaries of a handful of non-EU banks this year.
European banking experts played down the impact of the development and said that what the ECB was proposing to do was no more severe than the long-established practice of the US Federal Reserve testing the likes of Royal Bank of Scotland's Citizens unit and HSBC's US offshoot.
But the move marks a European first and one source familiar with the process said the prospect of undergoing the tests had rankled some of the banks affected.
'It's new and unusual, but I don't see it as a major departure,' said Tom Huertas, a partner at consultancy EY who formerly chaired the European Banking Authority, which carries out EU-wide stress tests. 'It's a natural progression.'
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