first_imgJPMorgan predicted two Greek banks – Eurobank and Piraeus – are among those most likely to fail, along with Portugal’s Banco Comercial Portugues. European officials have just completed an extensive health check on the region’s top 130 banks and are due to reveal the results tomorrow.The whole point is to weed out the weaklings that are hobbling the European economy, or that could spark a new financial crisis in the event of another long recession. Regulators have been poring over bank finances, and testing whether they have the strength to withstand a nasty shock, such as a spike in loan defaults or unemployment. The health of the sector is of vital importance for the eurozone, where growth has evaporated again and the spectre of deflation looms. Major players such as Deutsche Bank (DB) and Santander (SAN) were among the test subjects. Regulators will release a prognosis on each bank providing insight into how healthy the banks are now and how they could fare in the future. If a firm is deemed too sick – meaning it wouldn’t have the resources to cope with a shock – it will be forced to submit remedies, including possibly raising more money from investors. Analysts have been busy forecasting which banks are most at risk of failing. Pimco portfolio manager Philippe Bodereau estimates that 18 banks will fail the tests, though he didn’t say which. Source: CNN Money Facebook Twitter: @NeosKosmos Instagramlast_img

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