German Bank Helaba Blows Off Stress Test

Bloomberg, via Ritholtz:

Germany’s Landesbank Hessen- Thueringen snubbed the European Union’s bank stress tests two days before the publication of results, refusing to give the European Banking Authority permission to publish all of its data.
The bank, known as Helaba, disputes the EBA’s measurements of Core Tier 1 capital, the factor by which banks are said to have passed or failed the tests, because they don’t include some instruments allowed by German regulators. The lender said it passed the exams with a capital ratio of 6.8 percent, counting contractual changes around state funds of 1.92 billion euros ($2.71 billion), not included in the EBA results.
German regulators had already been critical of the EBA. Bafin Chairman Jochen Sanio last month said the EBA lacks “clear, defined corporate-governance structures, which alone could guarantee process legitimacy.”
Helaba’s move “challenges the very validity of the tests” because the EBA “doesn’t have the authority to force anyone to participate” in the exams, James Babicz, head of risk at analytics company SAS U.K., said in a telephone interview.

I don't know much about the Landesbank system, but from what I've read, they have a lot of bad loans out there.  My understanding was that they were deeply exposed to Austria and the Eastern European countries which had tons of bad loans.  I generally don't trust banks who fight about what qualifies as Tier 1 capital.  I tend to think that some doth protest too much.  In other words, they've got something to hide.  It will be interesting to see how this plays out.  It's not like anyone considers the stress tests, in Europe or the U.S. to be too stressful.