Icelandic banks pass the FME stress test
The three Icelandic commercial banks and Straumur Burdaras Investment bank, all pass the regular stress test of the Icelandic Supervisory Authority (FME). The FME has calculated the effects of simultaneous shocks on capital ratios of the largest Icelandic banks. The shocks imply that a financial undertaking must be in a position to take on certain setbacks that simultaneously may lead to changes in the value of shares, market bonds, non-performing/impaired loans and appropriated assets and the Icelandic krona without having its capital adequacy ratio drop below 8%. In addition to the formal stress tests the FME conducts various stress tests as deemed necessary in each case. The FME is now revising the stress test criteria and stress test methodology in the light of Pillar II requirements under Basel 2 rules.
http://www.fme.is/?PageID=581&NewsID=189
