Meginmál

Stress Test on capital ratio for the largest Icelandic banks e.o.y. 2006

Stress Test on capital ratio for the largest Icelandic banks e.o.y. 2006

NOTE: This article is from 21. March 2007 and is therefore more than 5 years old.

The FME has calculated the effects of simultaneous shocks on capital ratios of the largest Icelandic banks as described in Rules No 530/2004, with later amendments. The shocks implies 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%.

The effects of aforementioned simultaneous shocks on capital ratio are following as of e.o.y 2006 and end of June 2006:

The criteria used in the stress tests is available under this link.