European Banks Can Handle Interest Rate Shock, ECB’s Enria Says

Euro area lenders can handle a spike in interest rates as the benefit to earnings would alleviate the hit to capital ratios, according to the top oversight official at the European Central Bank.

Lenders “would remain broadly resilient to a textbook 200 basis point interest rate shock” even if there’s an economic slowdown as expected by ECB staff, Andrea Enria, who leads the central bank’s supervisory board, said Tuesday in Frankfurt.