Severe Covid recession could topple some EU banks

A handful of European lenders would see their core capital ratios fall below regulatory minimums under a prolonged coronavirus-induced recession, a new stress test by the European Central Bank (ECB) shows.

The so-called vulnerability analysis tested 86 top banks against three scenarios: one based on the European Banking Authority’s (EBA) 2020 baseline stress test scenario, and two calibrated for the Covid-19 crisis. In the worst-case Covid-19 scenario, eurozone GDP is estimated to decline a