Second, and more importantly, the ECB’s Governing Council does signal its subjective assessment regarding the balance of risk to the staff projections by explicitly giving qualified indications in various ways.
The banks stand at a healthy Capital Adequacy Ratio (CAR) of over 14 percent and have shown a steady increase in capital even in absolute terms, and equity of the banks is now Rs722 billion (June 2011). While the picture appears quite stable, the key challenge comes from the word I used just now “economic slowdown”.