Jul 21, 2010

"European regulators plan to detail three scenarios when they publish the results of their stress tests on the region's banks this week, according to a document by the Committee of European Banking Supervisors.

Banks will publish their estimated Tier 1 capital ratios under a benchmark for 2011, an adverse scenario and a third test that includes 'sovereign shock,' according to a template prepared by CEBS for the banks and obtained by Bloomberg News.

In the last scenario, banks will publish their estimated losses on soveign debt held in their trading book as well as 'additional impairment losses on the banking book' that they may suffer after a sovereign debt crisis, according to the document dated July 15."

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