EBA Stress Tests published 5 pm 15 July 2011


tick tick tick


So the Irish banks made it.

How fucked must spain be? as we suspected Spain is fubarred

stress-test.eba.europa.eu/pdf/EB … ort_v6.pdf

If Greek banks adhere to the same accounting standards as the Greek state they are fecked. Furthermore 70% of greek sovereign and of interbank debt is held by Greek banks as it happens…surely that ain’t counted as tier one is it ???

The spoofing continues. These results are not credible.

I think you’ll find the tests lack credibility too.

Double whammy so…

One has to ask why these ‘stress’ tests are not credible.

Many of the banks which have passed the ‘stress’ tests have been recapitalised by their national governments directly. That is the situation with BOI, AIB. Many others have been recapitalised indirectly by the repayment of bonds refinanced by national governments and ultimately by the ECB.

This sort of “everything is allright” mantra to keep people placated is all very well, but it does increase the uncertainty / risk of investing in bank shares and even of depositing money in a bank as there is no clear cut, credible information out there. If there were believable tests which allowed the useless banks go to the wall and the good banks to prosper, it would allow a reboot of the banking system. The scary thought is that they are all in the sh*t, which would result in world economic collapse.

Lehman’s on steroids. :open_mouth:

Update - others don’t think that the stress tests are credible.


Spanish lenders to be seized by Madrid

Spain’s official bank rescue fund, Frob, is preparing to nationalise three more groups of savings banks at the end of the month at a cost of nearly €5bn ($6.9bn), but could allow two others extra time to find investors to help boost their capital, according to people familiar with the discussions.
NovaCaixaGalicia (NCG), Caixa Catalunya and Unnim are expected to be recapitalised by Frob after failing to present adequate plans to secure new investors by a September 10 deadline.

The two that are likely to benefit from a temporary reprieve are Liberbank and BMN (Banco Mare Nostrum). Foreign investors have recently been examining the assets of most of the banks with capital shortfalls and, says one Madrid businessman involved, “they have certainly been spending a lot of time and due diligence on it”.
NCG, meanwhile, was quoted by Bloomberg as saying that Christopher Flowers of US private equity firm JC Flowers & Co met NCG executives in Galicia on Friday, in what is likely to have been an 11th-hour attempt by NCG to find a financial saviour and escape the clutches of the state.
All the groups have been created out of mergers between regional cajas as part of a nationwide restructuring plan that has already reduced the number of cajas from 45 to 15 and forced most of them to establish commercial banks.
With its lenders battered by the collapse of the country’s housing construction boom in 2007 and by the eurozone’s sovereign debt crisis, Spain earlier this year ordered its banks to ensure core capital ratios of at least 10 per cent of risk-weighted assets, or 8 per cent if they were listed on the stock exchange or had outside investors, by September 30.
The government and the central bank originally calculated that the total amount of new capital needed in the banking system was about €15bn, of which nearly €4bn was subsequently raised from the initial public offerings of Bankia and Banca Cívica in July.
Bank analysts say the final bill for the taxpayers will be two or three times as much as the official €15bn projection and possibly more than €50bn.
The state will end up with majority stakes in the banks it is recapitalising because of low valuations. While Caixabank, the new banking arm of La Caixa, floated at 0.8 times book value, Bankia managed only 0.4 times and Caixa Catalunya is expected to be valued at around 0.2.
Another lender called Banco Cam (formerly Caja Mediterráneo) was seized suddenly two days after Bankia’s flotation, and investors say it will be hard for the authorities to sell Cam or the other nationalised operations with losses mounting and the economy stagnant. Cam is due to be sold by early November if a buyer can be found.

ft.com/cms/s/0/044a4792-e08d … abdc0.html