European Banking Stress Tests Round 3: Greek Write-down6 October, 2011, 2:29. Posted by Zarathustra
Tags: Banks, Europe, European debt crisis
So finally, they admit that the stress tests of European banking system have been a total waste of time.
Financial Times a.k.a. European debt crisis rumour mill reports that EU finance ministers are asking the European Banking Authority to do it again. This time, they will finally stress-test some scenarios of big Greek sovereign debt write-down.
The last stress test result was announced on a Friday, and sell-side analysts were busy over the weekend to put in their own assumptions on top of the vast amount of data the last stress test to perform their own stress tests.
Whatever the new stress test result would be, we know that the European banking system is, well, very stressed. And by the way, stress test doesn’t solve the problem of stress. These banks need capital, and quick.