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The Thomson Reuters Alpha Now Research team explores a wide range of investing-related topics to help investment professionals identify emerging trends in the global financial markets. Our analysts use Thomson Reuters content and products to uncover notable developments in every region of the world. Whether you're interested in earnings surprises or commodities demand, macroeconomic trends or quantitative analysis, we're confident our research will provoke new investing ideas.
Our colleagues at Reuters Breakingviews just released a handy stress test calculator that enables you to visualize the impact of various recapitalization scenarios. We’ve posted the calculator below. Here’s an excerpt of the story:
MOST EU STATES COULD AFFORD LARGE BANK RECAPS
The barriers to a proper recapitalisation of Europe’s banks look political, not economic. That’s the conclusion of Reuters Breakingviews’ latest bank stress test, which analyses what would happen if governments have to fill the entire capital hole required to restore confidence in Europe’s financial system.
The shortfall created by a tougher stress test is certainly large. Take the 90 banks that participated in the European Banking Authority’s now-discredited exam in July. If banks were forced to mark their sovereign debt to market and achieve a core Tier 1 capital ratio of at least 7 percent under a stressed scenario, they would need 93 billion euros. Raise the pass mark to 9 percent, and the hole is 260 billion euros.
