EU’s Biggest Banks Pass Moody’s “Stress Test”

Many of the European Union’s biggest banks passed Moody’s (MCO) debt stress test designed to gauge their ability to withstand a market slump, the rating agency said in a statement Friday.

CNBC: “Based on our stress test, we believe that these banks would be able to absorb the losses that could arise from such exposures without requiring capital increases – even under worse-than-expected conditions,” Jean-Francois Tremblay, a senior analyst at Moody’s, wrote in the report.

“The average regulatory capital ratio of the banks that we stress tested is well above 9 percent,” he added.

The European Central Bank said last week that euro zone banks faced potential writedowns totaling $235 billion by the end of FY2011.

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