Germany’s nationalized Hypo Real Estate is country’s only bank to fail

Most European banks pass stress tests

FRANKFURT, Germany — A clear majority of the 91 EU banks have passed stress tests conducted by regulators — but Germany’s nationalized lender Hypo Real Estate Holding AG failed.

It was the only German bank to fail the European stress test.

Officials 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.

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

THIS IS A BREAKING NEWS UPDATE. Check back soon for further information. AP’s earlier story is below.

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.