As the FT notes:
Only nine banks failed the long-running stress test carried out on 91 European banks, far fewer than analysts had predicted, in a result that potentially undermines claims that the exercise was tough enough to restore investors' jaded faith in the eurozone financial system.
That about says it all: even now the Cowardly State can't face up to banks. We need a Courageous State.
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What the report might have added was that sixteen more scraped a pass and have been told to shore up fast (source: BBC business) . 23 out of 91 is just on a quarter of banks checked, which looks pretty uncomfortable.
The real issue is not the massaging of the figures to reduce the number of banks that failed – setting CT1 at only 5% and allowing inclusion of restructuring and backstop measures. It’s the fact that the entire test excluded the possibility of sovereign default. Sovereign default is the biggest risk facing European banks at the moment. These tests were therefore pointless. When are the EU leaders going to get their heads out of the sand?
Agreed entirely
It’s like assuming no derivative trading
Crazy…..
And utterly reckless
Totally with you on the need for a courageous state. We clearly have to work ourselves out of a difficult position but what’s the point if the end result, as directed by this government, is that the vast majority suffer to deliver only further concentration of the benefits in the hands of the few.
If it’s the majority who have to work and suffer to overcome the high hurdles, it’s that majority who should benefit. And, having, in Steve Bell’s words, regrown his balls, Ed Milliband needs to assert this simple fact – right now.
Enough of this blood-curdling timidity in the face of financial muscle and influence.