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gruffydd

Stress Tests Sham Exposed

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We all know that the European bank stress tests are rigged in that the stresses tested for are nonsenically optimistic (shouldn't they be testing for worst case scenarios, black swan events...????)

Now we're getting results leaks. Had the heads up on AIB and BoI hours ago. Both are OK apparently.

Looks like a PR sham to me!

I'm expecting a couple of fall guys, but no spectacular failures. Hope to be proved wrong, but the signs point to a spin machine in full swing...

Edited by gruffydd

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Strange the tests will cover only banks' trading books, rather than their outstanding debt holdings. I wonder why :lol:

Edited by gruffydd

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:ph34r: Why are they having a pass / fail only?

Why not rate every bank from most, to least, likely to fail, based on whatever system they like?

If bank X fails, then anyone ranked lower than them are likely to be in trouble.... :ph34r:

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Trading is bad, investing is good. Even if the underlying credits are the same.

Slowly but surely, they are attmpting to hide the true condition of banks' balance sheets by creating incentives for banks to move from mark to market accounting to accrual accounting. That encourages them to "hold and pray" when a position goes against them rather than liquidating the ones that they don't like.

By ignoring the systemic risk on non-trading instruments and encouraging the increase in instruments classified as non-trading with the resultant behvioural changes, they are actually increasing systemic risk.

Bizzare.

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every man and his dog knew these were a crock of sh1t from the start.how can you declare stress tests as ok and then not publish either the criteria or data on which they were based.

Its a bit like saying you know which cup the ball is under, looking yourself and not showing anyone, and declaring 'yup, I was right'.

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every man and his dog knew these were a crock of sh1t from the start.how can you declare stress tests as ok and then not publish either the criteria or data on which they were based.

Yep it's one massive con.

It's all front and no substance.

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Its 5 pm BST so where are the results?

I read they have decided 10 banks will fail. Lets see if this is accurate.

Dunno, but forex is like a wild west show, on what news I have no idea. The Euro went up like a rocket but is now heading back down...

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That is one hell of a long document. I'll go by the radio news that said 7 out of 91 banks failed. Spanish caja banks and some in Greece. How 'unexpected.'

Edited by deflation

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That is one hell of a long document. I'll go by the radio news that said 7 out of 91 banks failed. Spanish caja banks and some in Greece. How 'unexpected.'

As suspected, a couple of fall guys...

The currencies have settled back to where they started from before the results were out too.

Business back to usual, nothing to see here, please move along...

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Country Haircut value

Austria 5.6%

Belgium 6.9%

Cyprus 6.7%

Finland 6.1%

France 6.0%

Germany 4.7%

Greece 23.1%

Ireland 12.8%

Italy 7.4%

Luxembourg 6.9%

Malta 6.4%

The Netherlands 5.2%

Portugal 14.1%

Slovakia 5.0%

Spain 12.0%

Slovenia 4.2%

Denmark 5.2%

Sweden 6.7%

UK 10.2%

Czech Republic 11.4%

Poland 12.3%

Other non-euro area EU c 11.8%

EU average 8.5%

The above is the haircuts applied to soverign debt in the stress test.

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Strange the tests will cover only banks' trading books, rather than their outstanding debt holdings. I wonder why :lol:

No wondering needed. I knew it would be a cover up. Me thinks that we may be in for some interesting leaks about the real story on banks....

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http://stress-test.c-ebs.org/documents/Summaryreport.pdf

This is the website with the results

Flying through the pdf, the adverse scenarios do not look at all credible to me.

The other "big thing" that they left out was liquidity (with the Basel cop-out). Banks run into liquidity problems well before solvency problems when the market is paying attention.

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Country Haircut value

Austria 5.6%

Belgium 6.9%

Cyprus 6.7%

Finland 6.1%

France 6.0%

Germany 4.7%

Greece 23.1%

Ireland 12.8%

Italy 7.4%

Luxembourg 6.9%

Malta 6.4%

The Netherlands 5.2%

Portugal 14.1%

Slovakia 5.0%

Spain 12.0%

Slovenia 4.2%

Denmark 5.2%

Sweden 6.7%

UK 10.2%

Czech Republic 11.4%

Poland 12.3%

Other non-euro area EU c 11.8%

EU average 8.5%

The above is the haircuts applied to soverign debt in the stress test.

The UK's haircut relative to some EZ members appears to be extremely political.

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The UK's haircut relative to some EZ members appears to be extremely political.

That is because the BoE owns all the debt bought by QE.

Also look at Austria, they have lent 75% of thier GDP to solvent countries like Hungary and Romania. What a joke.

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Under the worst case Scenario the unemployment rate used for Spain is 21.6% I believe that it is currently 24% and rising.

What a joke.

To say nothing of the base case and adverse condition HPI predictions ......

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:ph34r: Why are they having a pass / fail only?

Why not rate every bank from most, to least, likely to fail, based on whatever system they like?

If bank X fails, then anyone ranked lower than them are likely to be in trouble.... :ph34r:

The banks details are closely protected because otherwise they could cause a run on the bank concerned, and thefore actually induce its failure. That's why when they go to the BOE on bended knee it is also confidential and happens much more than you know.

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  • 261 Brexit, House prices and Summer 2020

    1. 1. Including the effects Brexit, where do you think average UK house prices will be relative to now in June 2020?


      • down 5% +
      • down 2.5%
      • Even
      • up 2.5%
      • up 5%



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