Europe Passes Stress Test

84 of 91 European banks passed their stress tests. How will investors react?

After months of living up to their name, the four-month-long European bank stress tests yielded extraordinarily good news: 84 of 91 lenders passed the examination.  But not everyone is convinced that the tests were sufficiently rigorous to allay investor fears.

I round up the reactions in my New Atlanticist post “Euro Banks Pass Stress Tests But Investors Still Stressed” and conclude,

Despite the dismissals now about rigor, there was plenty of nervousness in the days leading up to today’s announcement.  We’ll soon see how the markets respond to the tests but my guess is that, as with the Greek bailout, this will be seen as a necessary but not sufficient step on the path to regaining confidence in the system.

That’s pretty tepid, I’m afraid, for something so major and so late in coming.   But it is what it is.

FILED UNDER: Economics and Business, Europe, Quick Takes
James Joyner
About James Joyner
James Joyner is Professor and Department Head of Security Studies at Marine Corps University's Command and Staff College and a nonresident senior fellow at the Scowcroft Center for Strategy and Security at the Atlantic Council. He's a former Army officer and Desert Storm vet. Views expressed here are his own. Follow James on Twitter @DrJJoyner.

Comments

  1. Russ says:

    lets hope the european stress tests does for them what it did for our US banks. Install a modicum of faith in their banks. It IMO never meant to be an audit, but be a arms lenght approval of their ability to continue for the short term and they as a group will do the thin blue line thing and [police] each other. notice the CRE meme has gone silent in the US, hey what happened?