Krisenszenario: Deutsche Banken im Stresstest stabil - mit Ausnahmen

The majority of German banks and savings banks are projected to withstand a significant global economic downturn, according to the results of a joint stress test conducted by the Federal Financial Supervisory Authority (Bafin) and the Deutsche Bundesbank. Nikolas Speer, the top bank regulator at Bafin, stated that the institutions overall remain solidly positioned.

However, several dozens of institutions failed to meet the capital requirements stipulated by the oversight in the simulated scenario. Speer emphasized that the institutions showing anomalies in the stress test would be particularly scrutinized. If necessary, supervisory measures would be taken in a timely manner.

The Bundesanstalt für Finanzdienstleistungsaufsicht (Bafin) and the Deutsche Bundesbank have been examining around 1,113 small and medium-sized financial institutions since April 1, covering almost 90% of the credit institutions in the country. The institutions were asked to provide their current results and risk situation, as well as their expectations.

The stress test simulated a crisis scenario over a three-year period, with potential escalations in geopolitical tensions leading to further trade barriers, supply chain bottlenecks, and rising commodity prices. The test also assumed a decline in global trade, resulting in negative impacts on employment and economic performance.

Additionally, it was assumed that there would be interest rate hikes and significant corrections in stock and bond markets. In such a stressful situation, the hard core capital ratio of banks and savings banks would decrease by approximately 3.8 percentage points to 14.6%. This means that the institutions would have fewer buffers to absorb further setbacks.

The ongoing high uncertainty regarding future geopolitical developments complicates the outlook for the business cycle, said Deutsche Bank member Michael Theurer. "The credit institutions must therefore proceed more cautiously in their business and capital planning to ensure that they can maintain a solid capital base and continue financing the real economy even in the event of unforeseen shocks," he added.

Since the global financial and economic crisis in 2008/2009, supervisors have regularly conducted stress tests to assess the vulnerability of banks in a crisis scenario. Risks in the balance sheet and weak points in the business model are to be identified as early as possible. As a result of such tests, supervisors may, for example, request individual banks to hold more capital to better cushion potential future crises.