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  • European Banks Feel Stress of Stress Test

    Finally, something reasonable. The European Banking Authority issued a series of bank stress tests to see how fortified European banks were, in the case of defaults by Greece, and possibly Portugal.

    Finally, something reasonable.

    The European Banking Authority issued a series of bank stress tests to see how fortified European banks were, in the case of defaults by Greece, and possibly Portugal.

    In the New York Times article, After Test Results, European Banks Are Urged to Bolster Reserves, Julia Werdigier and Jack Ewing, illustrated how the European Banking Authority has already conducted a series of bank stress tests, and some banks in Spain, Greece and Austria have failed these initial calibrations.

    In After Test Results, European Banks Are Urged to Bolster Reserves, it states, “The test results come amid rising anxiety that Greece is on the verge of defaulting on its debt, an event that could provoke a banking crisis because so much of those bonds are parked on the balance sheets of European financial institutions. As a result, the stress tests have clear implications for the overall health of the euro zone…“To me the real question is not stress in the institutions, but the ability of states to control the sovereign debt” problem, Paolo Bordogna, head of financial services in Europe for the consulting firm Bain & Company, said ahead of the release of the results.”

    At least the European Banking Authority is doing something proactive and aggressive to get in front of a potential crisis.

    Can’t say the same for the United States of America: and that’s a big part of our problem, because real solution are rarely reactionary — they are planned.

    Good Luck.

    Calvin Wilson
    Founder and CEO
    Upstart: Business and Management for 20-40 Year Old Professionals
    calvin.wilson1@verizon.net
    http://twitter.com/Upstart__Nation

     

    Filed Under: Global Business

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