Smith, Y. (2014) “Ilargi: 40% of Eurozone Banks Are In Bad Shape“, Naked Capitalism Blog, 23 Οκτωβρίου.
Yves here. While investors remain fixed on how much more the Fed and the ECB will pump into financial assets via QE, Eurozone banks lumber on in their walking wounded state. Deflationary pressures and lousy growth grind down weak and even once-good borrowers. And it’s not as if the banks who lent to them in the first place were good shape themselves.
As we wrote at the onset of the Eurozone bank stress tests, they were designed to be even more cosmetic than the US bank stress tests. Just a month ago, we posted an analysis that showed that many countries in Europe have banking systems weaker than those in Latin America.
Even with the efforts to use the stress tests as a confidence-building exercise, the result of the current exam of Eurozone banks is expected to be less than impressive.
Reuters has had a busy day today reporting on Europe’s banks and the stress tests the European Banking Authority is set to unveil on Sunday. And which put the EU and ECB on a see-saw like balancing act between credibility and panic.
The news bureau started off in the early morning citing a report by Spanish news agency Efe, which said 11 banks would fail the tests:
11 Banks To Fail European Stress Tests
At least 11 banks from six European countries are set to fail a region-wide financial health check this weekend, Spanish news agency Efe reported, citing several unidentified financial sources. The results of the stress tests on 130 banks by the European Central Bank are due to be unveiled on Sunday.
Four banks in Greece, three Italian lenders and two Austrian ones are among those that preliminary data showed had failed the tests, Efe said. It gave no details of how much capital the banks would have to raise and said this could yet change as numbers could be revised at the last minute. The euro fell on the report. Efe also identified a Cypriot bank and possibly one from Belgium and one from Portugal.
That’s right, the journalist lists 12 banks there, not 11. But anyway, that text is, miraculously, not available anymore, since at the same URL you now get the following article. Jean-Claude ‘When it gets serious, you lie’ Juncker’s first act in his first day in office as European Commission head may well have been to give Reuters a call. Make that a shout.
Σχετικές αναρτήσεις:
- Véron, Ν. (2014) “Europe’s Single Supervisory Mechanism: Most small banks are German (and Austrian and Italian) – a closer look at the ECB’s list shows that the smaller banks are concentrated in a limited number of countries, much more so than larger ones“, Bruegel Think Tank, 22 Σεπτεμβρίου.
- Gortsos, C. (2013) “The ‘Single Supervisory Mechanism’: A Major Building Block Towards a European Banking Union“, ECEFIL Working Paper Series, N. 2013/8.
- Darvas, Z. & Guntram, W. (2013) “Should non-euro area countries join the single supervisory mechanism?“, Bruegel Policy Contribution, Issue 2013/06.