July 20, 2010
Greece's economy is in tatters and its financial system is under pressure. But its banks appear poised to glide through Europe's "stress tests."
A similar paradox is playing out across Europe. As regulators prepare to release stress-test results for 91 big European banks on Friday, European politicians and finance officials are sounding surprisingly upbeat.
The mood among investors is decidedly different, with many convinced that undisclosed problems are lurking on some European bank balance sheets. Considering that the U.S. forced 10 of the country's 19 biggest banks to raise more capital after its own stress tests last year, a "soft" result Friday could undercut the sense of confidence that European policy makers are seeking to instill.
If banks in countries like Greece fare well in the stress tests, "maybe that means they're not tough enough," said John Raymond, a banking analyst with CreditSights, an independent research firm. "I think the market is going to be disappointed."
More
No comments:
Post a Comment