European Stress Tests: Banks Set For ‘Chaos Monday’ After Nine Fail !

- Things are going from bad to worse in the Eurozone. I cannot emphasize enough that global economic, financial and monetary collapse can happen at any moment. The financial and monetary quakes are getting larger and larger and faster than I anticipated. It appears the Illuminists may have brought forward their schedule for global financial Armageddon! Got physical gold/silver yet?
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European stress tests: banks set for ‘chaos Monday’ after nine fail
By Harry Wilson, and Philip Aldrick, http://www.telegraph.co.uk/
European banks are set for a day of “chaos” on Monday as investors and analysts derided the latest round of industry stress tests as “inadequate”.
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The nine banks that failed the European Banking Authority’s (EBA) stress tests will have to raise just €2.5bn (£2.2bn) between them to meet their capital shortfall. City analysts and investors said the criteria used by the EBA were overly optimistic and failed to capture the severity of the current sovereign debt crisis sweeping across the eurozone.
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“If the European Union could monetise the value of the credibility it has destroyed it would be richest organisation on earth,” said one major credit manager. The detail provided by the banks is far greater than in last year’s stress tests and the fear now is that with so much information fund managers and bank analysts will be able to make their own judgments on how much extra capital will be required by the 90 banks covered by the tests.
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“I think next week could see chaos. It’s clear the tests the EBA has done are inadequate. We now have the weekend to work out what the banks really need,” said one analyst at a major European bank.
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In addition to the nine that failed, another 16 banks need to strengthen their balance sheets to rebuild confidence in the embattled sector.Britain’s lenders received a clean bill of health but five banks in Spain, two in Greece and one in Austria failed the tests. Another German bank would have failed but dropped out of the tests due to a dispute over its capital. A further seven Spanish, two Greek, two Portuguese and two German lenders were among the 16 identified as perilously close to danger.
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The tests were conducted on lenders in 21 countries to assess whether they could withstand a prolonged recession without suffering such deep losses that their core capital ratios – their reserves against losses – dropped below 5pc.
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