Would your company pass the "stress test"

The European Central Bank has released its findings after “stress testing” the financial health of Europe’s banks

Twenty-four European banks have failed "stress tests" of their finances, the European Banking Authority (EBA) has announced.

The banks now have nine months to shore up their finances or risk being shut down. No UK banks are included.

The review was based on the banks' financial health at the end of 2013.

Ten of them have taken measures to bolster their balance sheets in the meantime. All the remaining 14 banks are in the Eurozone.

The health check was carried out on 123 EU banks by the EBA to determine whether they could withstand another financial crisis.

The list of 14 includes four Italian banks, two Greek banks, two Belgian banks and two Slovenian banks.

The exercise involved collating data provided by 6,000 auditors and central bankers from across the continent.

Problem loans buried since the financial crisis of 7 years ago were excavated.

The stress test came as a timely reminder that all businesses operating in today’s climate need to have constant and rigorous focus to their commercial exposure.

Against the current competitive background it is very difficult to contemplate turning away business especially from a customer of long standing. Business which carries a disproportionate risk/reward ratio is best left to competitors.

It may well be that turnover suffers when stricter controls are in place over such elements as payment terms and credit limits.

The reward for such fiscal discipline is obvious.

Avoiding defaults by customers still remains the surest way to protect the company’s bottom line.