“Absolutely no bank in Cyprus will fail the test, there is no such possibility,” one told the press. The report – citing several unidentified financial sources – said at least 11 banks from six European countries are set to fail a region-wide financial health check this weekend.

“Three banks in Greece, three Italian lenders and two Austrian ones are among those that preliminary data showed had failed the tests,” Reuters said. “Also identified (is) a Cypriot bank and possibly one from Belgium and one from Portugal,” it added.

The results of the stress tests on 130 banks by the European Central Bank are due to be unveiled on Sunday.

The unidentified sources gave no details of how much capital the banks would have to raise and said this could yet change as numbers could be revised at the last minute. The euro fell on the report. The ECB could not immediately be reached for comment. The exercise is designed to see how banks would cope under various economic scenarios, including adverse ones, and is likely to reveal capital shortfalls at some entities.

The ECB is carrying out the checks of how the biggest euro zone banks have valued their assets, and whether they have enough capital to weather another economic crash, before taking over as their supervisor on November 4.

Source: InCyprus