Nine Euro banks ‘set to fail the tests’

nine European banks are likely to fail this summer’s industry health check and will need to raise a combined 29 billion euros, according to a poll of investors by Goldman Sachs.

By The Newsroom

Published 7th Jun 2011, 10:07 BST

Banks in Spain, Germany and Greece will need to raise the most fresh capital, the US bank said in a research note released yesterday detailing the poll.

Thirty two per cent of respondents expected 10-25 billion euros to be raised as a result of the stress tests, Goldman Sachs said.

A quarter expected 25-50 billion euros to be raised, 27 per cent expected less than 10 billion euros would be needed and 14 per cent expected 50-100 billion euros to be raised. The responses implied a mean of 29 billion euros would be needed.

Goldman said 113 participants completed the survey, with 67 per cent in Europe and 27 per cent in the United States.

Almost half were long only investors and 30 per cent were hedge funds.