"If ye love wealth better than liberty, the tranquility of servitude better than the animating contest of freedom, go home from us in peace. We ask not your counsels or your arms. Crouch down and lick the hands which feed you. May your chains set lightly upon you, and may posterity forget that you were our countrymen."

Friday, 23 July 2010

Stressed & Tested

The 'big thing' today from a euro-zone point of view will be the results of the stress-testing of EU banks but I've nothing to add to what the press is already saying except for a comment at the end about how it all came about.

Across Europe, from Germany to Spain, via Greece, local authorities have dropped heavy hints that even some of their most troubled banks have passed the tests. As one banking analyst who asked not to be named said, "if they can pass the test then it will mean nothing". In a note to clients yesterday, Credit Suisse warned its clients that a "no bank failing" situation was the most likely outcome in its view.
Mark O'Sullivan, director of dealing at London-based foreign exchange firm Currencies Direct, also warned that if the tests were too weak they would "lose their credibility" but if they were too harsh this could "spook the market, making a fragile situation even worse. Whatever the outcome, it seems highly unlikely they will solve the confidence problem that still plagues the European banking sector," he stressed.
Wall Street Journal:
Industry and government officials in Greece, Spain and Germany have hinted this week that major banks in their countries will come through the tests without trouble. That optimism, especially given challenges facing a number of banks in each of the three countries, has raised questions about the rigor of the tests.
The EU was pushed into stress-testing the euro-zone banks by Spain during its recent presidency. The EU wanted Spain's banks to be stress-tested and Spain, in effect, said no problema, we will if you will, what are you scared of?   After initial reluctance the EU complied. The results are due to be released in full at 4pm BST/5pm CET. Whether the stress-testing is a PR exercise and a whitewash will be decided by the financial markets and no-one else.

For those whose lives won't be complete until they know the ins/outs, ups and downs of the stress-test results, The Guardian is running a live blog.

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