Early Reports on Stess Test of 91 European Banks Remain Murky:
Allied Irish has to raise over $7 billion, only 1 German bank doesn’t pass stress test, Portugal banks all pass stress test, Agricultural Bank of Greece and five Spanish banks have failed test. Experts agree that most of large european banks are well capitalized; however, big questions have been raised over methodology of the stress tests in Europe. According to Rodge Cohen, Sullivan & Cromwell LLP, if majority of european banks pass it brings into question [issue of ] transparency. Therefore, stress test skepticism and uncertainty raises possibility of a lower euro. Large deficits are still being carried and effectiveness of austerity programs raise doubts about the usefulness of the stress test in determining health of the European banks and subsequently its’ ability to restore confidence.
