Friday, June 18, 2010

Will European Bank Stress Tests Be The Same Mockery as U.S. Bank Stress Tests?

Leaders of European Union governments have apparently agreed to conduct public stress tests of their banks. Bloomberg reports that the ECB has stated it will "absolutely not provide banks with capital should stress tests show they need it". Inquiring minds are wondering where there is any chance that the European stress tests will reveal any serious shortcomings? ;-)

The Europeans seem to be suffering from a a little lack of imagination by copying the same tactics used in the U.S. Hey, it worked in the U.S....

"European Union leaders yesterday decided to publish the results of stress tests on the region’s lenders after Spanish bank officials unexpectedly pledged to make public results on individual banks".

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