European banks’ stress test findings – live blog

A tumultuous week for the eurozone ends with the results from the European Banking Authority’s annual banks healthcheck 3.34pm: German bonds are rising as Spanish and Italian government debt comes under pressure 3.20pm: But Sony Kapoor, MD of Re-Define, an economic think tank, says the unprecedented level of detail contained in the stress tests will be a “real punch” that’ll lead to a roller coaster few days. “The EBA has done everyone a big favour by shining the light of transparency on opaque risks in the European banking system.” “The next few days are likely to deliver a roller coaster ride as the new information contained in the stress tests is digested and everyone waits for EU policy makers to make up their mind on Greece.” “The bank-sovereign links that the stress tests reveal means that the pressure to sort out the Euro crisis and put in place a good bank resolution framework will increase sharply.” 3.06pm: Germany’s bankers have complained that the stress tests are going to provide so much detail that they might actually “exacerbate” the sovereign-debt crisis. “Given the tense situation which already exists in money and capital markets, we believe publishing the results with the present level of detail would exacerbate the sovereign-debt crisis,” the ZKA Central Credit Committee, representing Germany’s banking associations, wrote in a letter obtained by Bloomberg News. “To avoid further capital market turmoil, which would fly totally in the face of what the stress test was actually intended to achieve, we believe the level of detail needs to be significantly reduced.” More detail from Bloomberg’s Jonathan Weil here 2.38pm: If you’re wondering why you should care about whether or not some banks you’ve never heard of go bust or not, Larry Elliott just chipped in to remind us that the collapse of Austrian bank Credit-Anstalt in 1931 led to the Great Depression . 2.28pm: Still confused about how it all works? Read Jill Treanor’s dummy’s guide 2.08pm: Here’s a good little Bloomberg video in which Keefe, Bruyette & Woods analyst Jean-Pierre Lambert says he expects nine of the banks to fail. We says the results have already started leaking out and Spanish, Greek and German banks will all fail to make the grade. 1.45pm: Feeling stressed today? You ain’t seen nothing yet. It’s judgment day for Europe’s banks as EU regulator, the EBA, will publish the results of their stress tests at 5pm. About 10 of the 91 banks are expected to fail the test, which requires them to hold enough capital to protect against a collapse. The benchmark is 5% core tier one capital. Those expected to fall short include six small Spanish banks, three Greek banks and perhaps some German banks, with Germany’s Helaba pulling out of the test earlier this week. UK banks are expected to pass the test, but that doesn’t necessarily mean everything is A-OK – last year Ireland’s banks collapsed four months after being given a clean bill of heath. However, the tests have seen been toughened. The test results will presented as PDFs on the EBA website European banks European debt crisis Europe Europe Banking European Union Rupert Neate guardian.co.uk

Posted by on July 15, 2011. Filed under News, Politics, World News. You can follow any responses to this entry through the RSS 2.0. You can skip to the end and leave a response. Pinging is currently not allowed.