5 Spanish banks fail EU stress test

Five Spanish banks have failed a crucial EU stress test, according to a report released by European Banking Authority (EBA) on Friday. Catalunya Caixa, Unnim, Caja3, Banco Pastor and the Caja de Ahorros del Mediterraneo were among eight banks out of 90 which fell below the EBA\'s capital threshold of five percent core tier 1 over two years\' horizon. The other three which also failed include two Greek banks and one in Austria. On hearing the results, the Bank of Spain (BOE) issued a communique highlighting that none of the five banks would need an injection of further capital, \"thanks to the elements for the absorption of losses in our financial system, such as the generic provisions and bonds.\" BOE Governor Miguel Angel Ordonez said the EBA\'s results had been \"expected.\" Meanwhile the BOE stressed that Spain had presented a total of 25 entities for the test, compared to four or even fewer in other countries. In addition to the five banks which failed the stress test, a further seven Spanish banks were placed by the EBA under special observation with a core tier 1 rate of between five and six percent. These banks include Banco de Sabadell, Grupo Banca Civica (Caja Navarra, Cajasol, CajaCanarias and Caja Burgos), Caixa Ontinyent, Grupo BFA, NovacaixaGalicia, Bankinter and Banco Popular