The risk of accumulating excessive debt is greater in a monetary union than in countries with their own currencies. One reason is because the member states of a monetary union are not borrowing in their own currency.
Therefore, banks cannot afford to rest on their laurels based on this positive outcome, as several banks barely cleared the 5.5% capital hurdle in the stress test’s adverse scenario. Furthermore, five German banks would not have passed the stress test if it had been based on full implementation of the Basel III rules, which will apply from 2018 onwards.