Well, the Saturday hot spot forecast is panning out, patchily.
The market is doing its own stress test calculations and coming up with radically different answers: JP Morgan thinks 54 banks fail their version of the tests. Barcap is picking at the funding mechanism that would be needed if there was ‘real’ stress, beyond that envisaged in the undemanding official scenarios.
There is official moaning about non-revelation of sovereign exposures by some banks. FT:
European regulators have accused Germany and its banks of reneging on a deal to publish full details of sovereign debt holdings, as part of the four-month-long stress test exercise of the country’s banking sector.
In an interview with the Financial Times, Arnoud Vossen, secretary-general of the Committee of European Banking Supervisors, the pan-European banks regulator, said: “We agreed with all supervisory authorities and with the banks in the exercise that there would be a bank-by-bank disclosure of sovereign risks.”
Deutsche, the most conspicuous offender, sagged a bit at the open, but the market will be chary of expressing too much disapproval just now: Deutsche’s quarterly results are due tomorrow. Not much action in ABN-Amro, so maybe they did put their sovereign exposures up, somewhere.
Elsewhere the circularity sovereign stress-> bank stress -> sovereign support is attracting some scrutiny.
All quiet…except Euribor is getting worse