Most euro zone banks deemed financially healthy

The European Central Bank says that most of the banks in the 18-nation euro currency bloc could survive a financial crisis, an assessment that could help spur more lending to boost the eurozone’s flagging economy.

The central bank said Sunday that at the end of last year 25 of the 130 biggest banks failed a financial stress test and needed to raise $32 billion to have enough capital on hand to cover losses during a severe economic downturn.

But much of the money has now been raised and the European Central Bank said that only 13 have a capital shortfall, including four in Italy and two in Greece. No major banks failed the latest stress test.

The eurozone, collectively, is the world’s largest economy, but its growth has been tepid at best. Some analysts fear it could fall into its third recession in six years.

But with the favorable results from the review, analysts say some banks now might be more inclined to lend more money, which could help spur economic growth.


(Image: Przemyslaw ‘env1ro’ Szczepanski)