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Germany’s Hypo Real Estate fails stress test

The Columbian
Published: July 23, 2010, 12:00am

FRANKFURT, Germany (AP) — German financial supervisors are saying the nationalized lender Hypo Real Estate Holding AG is the only German bank to fail the European stress test.

They said Friday that HRE’s tier 1 capital ratio would fall under 6 percent under two tested scenarios in which the economy goes back into recession and there is a new sovereign debt shock.

Germany’s 13 other tested banks passed.

The tests are measuring the ability of 91 European banks to withstand an economic downturn in an attempt to reassure markets.

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