Stress Test Shows Europe's Banks Are Adequately Prepared for Economic Turmoil

Europe’s banking sector could withstand a severe economic downturn without depleting their financial buffers against losses, the European Central Bank said Friday.

A survey of 98 large and medium-sized banks done by the ECB’s supervisory arm in conjunction with the European Banking Authority showed that even in the most adverse scenario — a fall of almost 10% in economic outpoint over three years — banks would still have enough capital to cover losses and then some.

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