Europe suspended the medical reports of its banks - July 19, 2010
There is a little over a year, the United States 19 U.S. banks subjected to stringent medical examinations. The release of the stress tests were then allowed to restore confidence in the U.S. banking system. Europe, undermined by the suspicion surrounding its banks, hoping to achieve the same success this week. Friday evening, 91 European financial institutions, including 27 Spanish, 14 German and four French, will unveil the results of "stress tests" concocted by the Committee of European Banking Supervisors. This measure of bank capital in the light of deteriorating economic environment. "We will see that all major European banks are in fact strong enough to withstand any earthquake either," Dominique Strauss-Kahn predicts.The director of the International Monetary Fund (IMF) does not, however, that the tests reveal "by here and there, small financial institutions in trouble." Black spots are expected in the German Landesbanken, the cajas Spanish or Greek banks.
Operation Truth
Already, the fact that Europe agrees to engage in this exercise in transparency has alleviated some pressure on the markets in recent weeks. Especially after a shaky start, the finance ministers meeting in Brussels last week, promised to act "in a coordinated manner and with greater transparency that is, by Belgian Didier Reynders No fax cash advances .
Just stay to confirm. For this, two opposite pitfalls are avoided. The first is that everybody is received.These days, voices were raised across Europe to ensure that Irish banks here in Portuguese, there, or even the Belgian KBC and Dexia, had passed their entrance exam. If all European banks triumphed over the obstacles set by supervisors, this would destroy any credibility to the operation truth. At this stage, the discounts applied in testing the debt of peripheral countries like Greece or Portugal, have not been disclosed. Their severity will be watched closely.
Second risk, in contrast, the health bulletin proves very alarming. Analysts at Credit Suisse, amounting to 90 billion euros for recapitalization requirements, a level below the capacity of public funding available in Germany or Spain.In the end, "stress tests" are designed to prove that European banks hold the shock but rather that governments, even the new European support fund, are capable of supporting them. First answer Friday.