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Europe stress tests: Roughly as predicted (or leaked), eight of the 91 banks that went through...

Europe stress tests: Roughly as predicted (or leaked), eight of the 91 banks that went through the tests failed, more or less where they were expected: five of Spain's savings banks, two in Greece and one in Austria. The combined worst-case capital shortfall was €2.5B, vs. last year's €3.5B.
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Comments (4)
  • The Other Street
    , contributor
    Comments (678) | Send Message
     
    The Euro/Dollar September Futures went up a bit on the news, barely to Wednesday's reversal close. As long as we do not know to which level the sovereign debt holdings have been stress marked down too, this continues to be typical of a European fudge. If the stock market is any indicator, it is still stuck in S&P 1310-1315 range. Even the final Italian vote did not break it.

     

    I remain fully hedged, short the Euro/Dollar September Futures @ 1.4135, but I bought some BCS August 15 calls.
    15 Jul 2011, 12:18 PM Reply Like
  • Duude
    , contributor
    Comments (3382) | Send Message
     
    Much like after the last stress test, this only tells us what the EU wants to reveal to us. Most all European banks still get the support of mark-to-original basis, aka mark-to-fantasy. This tells us nothing about the overall health of European banks rather which banks they're willing to throw under the bus.
    15 Jul 2011, 01:26 PM Reply Like
  • brikla
    , contributor
    Comments (3) | Send Message
     
    The Bank of Ireland already had a CREDIT EVENT on July 11th, so how could it possibly pass a stress test??? Please explain this.
    www.reuters.com/articl...
    15 Jul 2011, 02:21 PM Reply Like
  • valueinvestor123
    , contributor
    Comments (327) | Send Message
     
    I bet if you made all the banks assume that Greek debts only gets knocked down to 75% of face value, they would all fail. These stress tests are a joke and everyone knows it.
    16 Jul 2011, 09:03 AM Reply Like
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