There ‘s been too well. Much of the Anglo-Saxon journalism summarizes the results of stress tests on the European banking system of the Old Continent, but it is clear that the criteria used to conduct these tests on non-EU banks were less harsh and comprehensive than those carried out on U.S. banks.
Not that lack the critical, no doubt, but after all the work done by experts in the CEBS (closely monitored by the ECB and the Commission) has been accurately and consistently. Certainly the lack of default of the hypothesis of a European state can be considered a weak point in the credibility of this exercise. It should be remembered that the U.S. success in their stress tests have only counted 19 banks against our 91 and that certainly did not included in their scenario the possibility of failure of an internal state of the federation (eg, California) who also is the way things are no less likely than the failure of a member of the European community.
To ensure that the sovereign debt market and support the liquidity of EU nations in Brussels device has thrown a life preserver in the water by some 750 billion €, which means much more than America has made so far with the Paulson plan.
If anyone wants to talk about the dependence of European banks by the ECB financing (also in reducing dependence) could remember the financing of the U.S. TALF, not approved by the U.S. Congress, which is the direct support and assured markets that the economy was a choice without doubt much less intense than that to allow the ECB a partial intervention in favor of the banks with liquidity crisis.
If you go to Britain, it may be recalled that the British banking system still exists only because the government has saved the UK with funding more or less transparent and with the help of foreign investors. The haircut, which is the projected reductions in the value of European sovereign debt in the event of a serious escalation of the economic conditions are certainly not comparable to the default of a sovereign state, then who really believes that the United States and Britain to deserve a rating Triple A?
Obviously, such doubts do not lead to anything really constructive, but at least contextualize findings. The recent intervention by China in the auction of Bonos revealed significant support for the euro in Beijing and then a parachute provided the most potential. The critical issues have emerged where all sectors, namely Spain, Germany and Greece. The funds derived from state aid were included in the capital requirements of the test: the other side to that otherwise would be served? If you count the capital required by the German Hypo Real Estate, Ate the Greek and Spanish from 5 speakers that would not be able to keep the tier 1 ratio above 6% (in case of crisis) we arrive at the figure of 3.5 billion € of new capital required, a figure much lower than expected scontavano interventions often well above 30 billion €.
To what extent this can really be considered an indicator of a “soft test” and not a financial success of the European Union? The mine of Landesbank did not explode, but NordLB and Postbank were more fragile than expected. Nobody hides certain that the German banking system is still weak (at least in some cases), even the local authorities, in some cases, are already running for cover. Ditto for Spain, which has already begun the process of intervention in the Iberian World Savings Banks often seriously damaged by the housing crisis.
What I really stress test revealed these is the strong link between the real economy and European banks. Irwin Stelzer, Hudson Institute, an American expert who has published a quite critical article on the EU stress test between the pages of The Wall Street Journal, said that according to UBS and other observers in the risky assets financed by the Spanish banks would not be only 5 %, but approaches the 14 per cent. If it is also true that 70% of the debts of unlisted Eurozone has been contracted to banks and not, as in America, the market for capital is increasingly a real danger that the sluggish recovery weights also on Credit Institutions. The links between business and society on the one hand and the other banks achieve one of their quotes right in the beautiful country where traditional activities, relatively far from the international finance, are still the main source of income for banks. In practice this means a stronger link with the territory and greater cyclical but may be helpful in view of improving the situation. The next important event is to Basel, where new rules will be room for everyone. The ability to influence the debate will be crucial for Italy, because of its different characteristics, is likely to be inappropriate and detrimental as the new legislation. For this reason banks will have to fight again, not to discover the aftermath of Basel, the business model that has saved them has become less convenient than banks less “virtuous”.
No related posts.