The objective of the EU wide stress test exercise commissioned by the Council
of Economics and Finance Ministers (ECOFIN) and coordinated by CEBS in cooperation
with the European Central Bank (ECB), national supervisory authorities and the
European Commission, is to assess the overall resilience of the EU banking sector
in accommodating possible future shocks. The exercise has been conducted on a
consolidated bank-by-bank basis for a sample of 91 EU banks from 20 EU Member
States, covering about 65% of the banking sector, in terms of total consolidated
assets in all of the 27 EU Member States. In each Member State, the participating
banks are supposed to cover more than 50% of total bank assets. Detailed data
are available on the website of the Hungarian Financial Supervisory Authority
(www.pszaf.hu/en).
The exercise was based on the situation as of end of 2009 and analyses the evolution
of Tier 1 capital and the Tier 1 ratio of the banks on the basis of three possible
scenarios for 2010 and 2011. The baseline scenario serves as a benchmark against
which an adverse macroeconomic scenario is evaluated. The third scenario is the
modified version of the adverse scenario in which a sovereign shock affecting
all countries of the EEA area is assumed. Such a shock would primarily have significant
impact on the commercial portfolios of the banks.
The most important accomplishment of the stress test is that, beyond the regularly
published information, the stakeholders are in a position to receive comparable
data on the capital status of the banks through a coordinated exercise with a
commonly agreed methodology from a prudential and financial stability perspective.
The stress test has set an expected 6% threshold for the Tier 1 ratio which is
50% higher than the current regulatory minimum of 4%. This 6% shall by no means
be regarded as a regulatory objective, however, it is considered adequately prudent
for assessing banks’ capital status. Both OTP Bank’s and FHB Mortgage Bank’s
results, based on consolidated data according to the International Financial Reporting
Standards, are sound and well above the expected threshold under all scenarios,
including the adverse scenario supplemented by an additional sovereign shock.
The HFSA highly appreciates the excellent professional cooperation by both Hungarian
banks participating in the exercise, the success of which may well contribute
to strengthening public confidence in Hungarian banks.
Budapest, July 23, 2010
Hungarian Financial Supervisory Authority
Further information for the press:
BINDER István Spokesman
T:+361 489-9235; +3630 921-6361
E-mail: binder.istvan@pszaf.hu
