Europe publishes bank health-check results

DUBLIN (Reuters) - Twenty five euro zone banks failed a landmark health check of their ability to withstand another economic crisis with a capital shortfall of 25 billion euros at the end of last year, the European Central Bank (ECB) said on Sunday. Here are reactions from investors and analysts to the results. MAX ANDERL, HEAD OF CONCENTRATED ALPHA AT UBS GLOBAL ASSET MANAGEMENT: "There is a lot of information that needs to be looked at in detail, both in terms of the asset quality review as well as the stress test. But the first impression is that there are few surprises." "We expected a tough and therefore more credible test. Consequently, not all of the 130 institutions were expected to do well. As expected 25 institutions failed. Indeed, the document refers to many of the ‘usual suspects’ mainly in Greece, Portugal and Italy in the quoted sector.” ERIK NIELSEN, CHIEF ECONOMIST, UNICREDIT: “There are way too many policy makers who think that the publication of the AQR and stress tests will itself lead to a boost in bank lending to the private sector which will somehow trigger the recovery. But that’s extremely unlikely.” “By far the greatest share of the ‘lending problem’ is a demand problem. In the euro zone, lending to the corporate sector has always lagged GDP by 6-9 months, and I see no reason why this should be materially different this time. Thinking that lending somehow can lead GDP is an illusion, and I don’t know how that has somehow crept into the policy debate." "Businesses need to believe in an increase in the demand for their products before asking for credits, and now that external demand growth is no longer there, this is when the euro zone needs demand stimulus. Economics 101.” (Reporting by Mike Peacock and Simon Jessop. Editing by Carmel Crimmins)