The European Banking Authority is said to be setting a passing grade for eurozone banks’ stress tests that hinges on their ability to deal with two small declines in the region’s gross domestic product. The German newspaper Handelsblatt reported that the EBA’s scenario for the tests includes GDP drops of 0.5% in 2011 and 0.2% in 2012, as well as a property crisis, poor capital-market conditions and negative impact on bank-held securities.
