With multi-billion dollar penalties for banks being thrown about like nickels and dimes - the latest being BNP Paribas facing a $10B hit - the ECB is considering adding the impact of fines to its stress tests, reports the WSJ.
The ECB is trying to asses whether lenders have set enough aside in reserves for the payouts. If banks were to be found wanting, it could mean the need for additional capital raises. BNP makes a good example: In February, it said it had $1.1B reserved for the U.S. penalty, but two months later warned this may not be nearly enough. Now the figure is up to $10B, and executives at banks all over are watching nervously.