Only 7 of 91 European banks failed the stress test!
Sounds great, until you realize that the tests did not take into account the possibility of debt defaults by Spain, Portugal, Greece, Ireland, and Italy.
Oh, and the 6% Tier One capital requirement minimum? Lehman Brothers had more than 10%, how’d that turn out?
Mostly, these tests, like the ones in the US, are about extend and pretend.
The hope is that world economic growth will eliminate any threat to solvency.
And of course, the best way to achieve this is the German and Chinese way: beggar thy neighbor!
Gorilla says: “The underpants gnomes withdrew their funds long ago!”
