by Geoffrey T. Smith
Wall Street Journal
April 7, 2011
Whisper it softly, but…is that?…can it be?… a light at the end of the tunnel of Europe's banking crisis?
The answer may yet be: "No, it's an oncoming train of disorderly sovereign default," but the news flow has, in the main, stopped getting worse, and in some quarters is improving beyond any reasonable doubt.
The key question remains whether it is improving fast enough to cope with the sovereign-debt restructuring that is looking increasingly likely.
First stop: Ireland. After four tries and €46.3 billion ($66.4 billion) of public money, it has finally produced a realistic worst-case scenario and provided for it convincingly with its latest round of stress tests. It isn't just that the sum of fresh capital to be injected—€24 billion—seems to cover every eventuality.
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