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Eu Bank Stress Tests Will Be Tougher

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http://uk.reuters.com/article/2011/03/01/uk-summit-finance-stresstests-idUKTRE7204B720110301

A pending health check to restore credibility in European banks will be far tougher than last year's flawed test and governments need to be ready to prop up lenders who don't pass, a top regulator said.

"We need to learn from the past and move to a more rigorous and serious exercise," Andrea Enria, chairman of the European Banking Authority (EBA), told the Reuters Future Face of Finance Summit on Tuesday.

"The macro scenario will be tougher, significantly tougher, than last year in terms of deviation from the base line growth," said Enria on his first day as chairman of the EU's powerful new banking watchdog.

"One important point is for this exercise to work we need to make sure there are backstops for banks," Enria said. "We cannot just publish data showing banks having shortfalls of capital and then the day after nobody is providing capital."

He added: "Last year there was a disaster, where a clean bill of health was given to banks that had major problems a few months after and needed capital injections."

The European Central Bank and European Commission will help again with this year's stress test of largely the same lenders but ultimately the "hot potato is in my hand," Enria said.

The credibility of the EBA, formed at the start of the year, is on the line too, he added.

Last year 91 banks were tested and only seven failed. No banks failed from Ireland, a country the EU and International Monetary Fund had to later bail out.

Apart from factoring in a tougher economic downturn, this year's test will also look at liquidity resilience and shocks from home loans turning sour.

They have a bit of a problem here, they clearly need to have a bailout package ready for the banks they are going to fail, but in failing the banks they are going to cause a even bigger deficit problems as no one has the money to bailout the banks again...

This is one hell of a bailout recovery.

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http://uk.reuters.co...E7204B720110301

They have a bit of a problem here, they clearly need to have a bailout package ready for the banks they are going to fail, but in failing the banks they are going to cause a even bigger deficit problems as no one has the money to bailout the banks again...

This is one hell of a bailout recovery.

Xceptional "hellish" find!

"We cannot just publish data showing banks having shortfalls of capital"

So bankrupt banks with their banker staff claiming billions in 'profits' > = bonuses will not be declared as "running insolvent" to the people by the top EU Banking/Financial regulation/investigative bodies? :o:lol::ph34r:

Edited by erranta

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So basically admitting the situation is bad, but also saying they can't admit to it being bad, so they'll still try to fudge it/cover it up etc.

It's all blow up in their corrupt faces. It's just a matter of time. HAHAHAHAHA!!! :lol::lol::lol:

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http://www.telegraph.co.uk/finance/economics/8355703/German-Irish-brinkmanship-raises-EMU-stakes.html

....

A group of 189 German professors has stiffened the Bundestag further by warning of "fatal consequences for the whole process of European integration" if the EU crosses the Rubicon to a de facto debt union.

"I cannot remember any occasion when lawmakers have set guidance like this before: Merkel has very little leeway," said Hans Redeker, currency chief at BNP Paribas. "There is going to be disappointment at the summit and that will make life even harder for the EMU periphery."

Mr Redeker said the EU's new criteria for bank stress tests to be agreed this week adds another risk. If the tests are seen as a sham, like last time, they will sap confidence: If too tough, they will revive fears over the capital levels of weaker lenders.

The EU dispute comes as the latest oil spike queers the pitch for vulnerable countries on Europe's fringes. A report by Ernst & Young warns that if oil stays near $120 for the rest of this year, it will cut EMU growth to just 1.1pc this year and 1.2 next.

"We think the peripheral countries would suffer most. Spain, Greece, and Portugal face a double whammy since they have no room to offset the oil shock by slowing the pace of fiscal consolidation," said the author, Marie Diron. Oil at $150 would tip the eurozone back into recession, with the risk of cross-border bank contagion and default by at least one country.

German finance minister Wolfgang Schauble is hoping for a "grand bargain" in which weaker EMU states agree to stringent discipline in exchange for a boost to the bail-out fund, hoping this will assuage critics at home.

However, Germany's plans for budget vetting and intrusive reforms set off a storm at an EU leaders dinner earlier this month, with some calling it a diktat that trampled on sovereign prerogatives. Mr Schauble has dug in his heels, insisting that "the German government is not willing to make any compromise on this issue."

More of AEP at the link.

Looks like the oil price recession figure has been increase, in the past it was around $90-$100 range which was of course during a boom, now during a financial crisis this figure has naturally increased to $150 which of course makes perfect sense. Although I'm suspecting it's not the recession issue here it's the tipping point for another banking crisis, which makes a Bernanke's printing all the more amusing that he's going to trigger another bank run if he keeps it up, something ironically that he's trying to stop by printing. The wonders of unintended consequences, unless of course Bernanke knows bank failures are inevitable and he's going to blame the oil price, which he naturally has no control over?

Edit to add:

When I mean he has no control over, I'm meaning the public will assume this.

I'm beginning to think we are seeing the ripple effect working.

Edited by interestrateripoff

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which makes a Bernanke's printing all the more amusing that he's going to trigger another bank run if he keeps it up, something ironically that he's trying to stop by printing. The wonders of unintended consequences, unless of course Bernanke knows bank failures are inevitable and he's going to blame the oil price, which he naturally has no control over?

indeed, since the first TARP bailout this outcome was inevitable as

printing is revving the engine with little no power going where you want sooner or later the engine will stall/seize up/blow up and it is nice to be able to point to the other car (oil) that just hit you head on as the cause of the crash when in fact steering the car and adding speed was the real cause.

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Nightmare On Euro Street. 25.05.14. Sunday Times.

From November 4, the ECB will be the eurozone's lead regulator with powers that override individual central banks. It will have powers to shut down failing lenders and force creditors to absorb losses to help immunise governments from the risk of "too big to fail" bailouts.

Pic attached I took of the article. Probably will be delayed or watered down.

eurobanktrash1a.jpg

eurobanktrash1b.jpg

eurobanktrash1c.jpg

post-12306-0-92897000-1401198002_thumb.jpg

post-12306-0-80775500-1401198020_thumb.jpg

post-12306-0-55978500-1401198034_thumb.jpg

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I think I heard someone say on the radio over the weekend that another big bank will probably fail in the foreseeable future - think he was referring to a UK one. Think I heard it on R4 or R5 one morning whilst I was half asleep.

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Pic attached I took of the article.

Thanks for posting this.

I flicked through the Times yesterday whilst in a cafe and too noticed this article.

This bit made me laugh....

Certain banks may find that a loan they had described in their accounts as 'commercial real estate performing' will be described by the ECB as 'chip shop non performing'.

Can't remember if it was part of this same article or the separate one on an earlier page, but I do recall the article saying that some of the banks asset's had already been looked at, and the next part they were going to look at now, was going to be property, to check if the value of property on their books was the correct one. It said something along the lines of, that investors wanted to be made aware of what was the true value of the banks' assets.

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Thanks for posting this.

I flicked through the Times yesterday whilst in a cafe and too noticed this article.

This bit made me laugh....

Certain banks may find that a loan they had described in their accounts as 'commercial real estate performing' will be described by the ECB as 'chip shop non performing'.

Can't remember if it was part of this same article or the separate one on an earlier page, but I do recall the article saying that some of the banks asset's had already been looked at, and the next part they were going to look at now, was going to be property, to check if the value of property on their books was the correct one. It said something along the lines of, that investors wanted to be made aware of what was the true value of the banks' assets.

Good memory. It was in the Nightmare On Euro St. article - together with, "The market thinks about 30% of Europe's banks should fail the stress test,"

Edited by Venger

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  • 276 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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