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:

Kaupthing-

banki hf.

Glitnir

banki hf.

Lands-

banki hf.

Straumur

Burdarás hf.

Capital Ratio (CR)

12.1%

13.7%

15.1%

31.7%

  Thereof Tier 1 ratio

8.7%

9.1%

12.9%

30.2%

Capital Ratio (CR) after stress test

9.2%

12.5%

12.7%

24.0%

For further information contact: Ragnar Haflidason

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