20 July 2011

2011 EU-Wide Bank Stress Test: Scenario May Not Be Main Issue

The feedback to the results of 2011 EU-Wide Bank Stress Testing Exercise published by European Banking Authority (EBA) on 15 July so far has mainly focused to the stress test scenario. In the following presentation/video I explain why the scenario may not have been the main issue. In other words: why several more banks, including some of the largest banks by assets, effectively failed the test based on the very same 'not stressful enough' scenario. By that I use the example of Deutsche Bank.


  1. The analysis is now available for all 90 stress-tested banks: http://beta.logicoffinance.com/Expert_Comments.php

    Kindly let me know what do you think.

  2. You have well exaplined the fact by example why the scenario may not have been the main issue.I hope as it has cleared my mind from several myths it will done with others too.

  3. Hi Same Day Loan,

    I hope so too. Unfortunately funny calculations continue. See for example my other post about the 2011 EU Capital Exercise in December last year: http://blog.logicoffinance.com/2011/12/2011-eu-capital-exercise-funny.html

  4. You have focused well on the stress test scenerio.Thanks for the shared video.I appreciate your site. It is valuable enough. Thanks for the nice analysis.Keep posting.

  5. Thanks for sharing, this post truly help people who are in search of this kind of information. Keep it up.

    1. Thanks for your comment and for your other comments as well :). This really helps to stay motivated, even though blogging is kind of charity in the sense that you most often spend hours (for zero pay) for simply formulating and sharing what you know - even though only very limited number of readers ever gives you any feedback.

  6. Deutsche Bank has admitted its weak capital position in the latest Investor Day presentation on 11 September 2012 while making it come as no surprise:

    "It shouldn't come as a real surprise that we restate that we are, relative to our peers, weak on capital while complying with all regulatory requirements comfortably and not having to ask for any help. This is obviously something that we're going to address." (Quote of Juergen Fitschen, the Co-Chief Executive Officer and Member of Management Board)