We weren’t that taken aback by the WSJ’s recent, ah, exposé revealing that Europe’s recent stress tests were – shock! – perhaps less than helpful on the actual exposure of banks to risky sovereign debt.
But at least someone has taken it rather personally. Read more
CreditSights has created a sort of EU bank stressometer.
In their words, it seeks to “exploit” the additional disclosure on sovereign risk published in the CEBS-administered European bank stress tests. And while it’s very fun to play around with (yes, FT Alphaville is easily amused) it won’t do much to help alleviate still lingering questions surrounding certain missing exposure to Greece — specifically within the German banks. Read more
Here’s a somewhat surprising finding from BNP Paribas’ Bartosz Pawlowski.
A closer look at the adverse scenario assumptions made by the Committee of European Banking Supervisors (CEBS) for use in the European stress tests reveals one particular recession-defying European country high up in the sovereign haircut leagues. Read more
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. Arnoud Vossen, secretary-general of the Committee of European Banking Supervisors, told the FT the CEBS would talk to German regulators about the failure of at least 6 of 14 German banks to publish information. The CEBS on Friday issued test results showing that seven of the 91 EU banks tested failed to achieve a tier one capital ratio of 6% under a series of macroeconomic scenarios for 2010-11. Read more
If you’re thinking it’s an odd time to be holding a special session of our regular Markets Live chat, well that’s the Committee of European Banking Supervisors for you. It has chosen the close of play in Europe on a Friday as the perfect time to formally release the results of the European bank stress tests.
So join Paul Murphy, Joseph Cotterill, Stacy-Marie Ishmael and Izabella Kaminska at 4.45pm London time, 11.45am New York time to discuss the results. Read more
Stress test Friday is upon us. At 5pm London time/6pm Central European time/12pm Eastern Time, the Committee of European Banking Supervisors is scheduled to publish an aggregate summary of the results of the European bank tests. From then on, individual results will be published on an ad hoc basis by the banks or their national regulators. FT Alphaville will be holding an extra-special stressed-out session of Markets Live from just before 5pm London time (12 noon NYC) onwards, which will see the fabulous and predictively-gifted Paul Murphy handle market and analyst reaction to results. In the meantime though — here’s a handy Q&A courtesy of Goldman’s Nick Kojucharov. Read more
Analysts are down to their last gasps of stress-test commentary before we finally get the official results on Friday. Credit Suisse had a useful contribution on Thursday, tackling the queasy ‘everyone’s a winner!’ hints that politicians have been dropping.
Basically — we should hope so, given the bailouts already in the system. Read more
Leaks and rumours abound ahead of European stress-test result day, not least because the test results could include more information than earlier thought, says FT Alphaville. EU regulators are now reportedly likely to release the results earlier than planned, seeing them hit during European trading hours. European markets would have been closed if the CEBS had released results according to their original schedule. Read more
Is the CEBS reading this little paper ahead of Friday’s stress tests?
The Information Value of the Stress Test and Bank Opacity Read more
Europe’s largest banks may give breakdowns of their sovereign-debt holdings when they issue stress-test results on Friday, according to a document from the Committee of European Banking Supervisors obtained by Bloomberg. European regulators have asked the region’s biggest banks to publish a list of their gross and net exposure to central and local governments in 30 countries in the region, which could be published on Friday alongside information about their financial health, reports Bloomberg. Read more
European regulators plan to detail three scenarios when they publish the results of their stress tests on the region’s banks this week, according to a document prepared by the Committee of European Banking Supervisors and obtained by Bloomberg. Banks will publish their estimated Tier 1 capital ratios under a benchmark for 2011, an adverse scenario and a third test that includes “sovereign shock,” the newswire says. Meanwhile, the FT reports that market scepticism about the credibility of the tests intensified on Tuesday as results began to leak that showed far fewer banks than expected have failed. Results are due to be published on Friday. FT Alphaville has the schedule – along with European bank short interest. Read more
Forget questions over sovereign bond haircuts — they’re a definite go in the eurozone banking stress tests, even if you disagree about the amounts in play, FT Alphaville writes. The real issue is where the haircuts will fall – on trading books, or on held-to-maturity assets as well. Now Barclays Capital’s had the idea of applying losses to HTM assets with maturities beyond 2012, on the rationale that near-term sovereign defaults look less likely in Europe. Read more
European regulators on Wednesday night published details of its exercise to stress test the continent’s banking industry, identifying 91 banks being probed, reports the FT. After heated talks between national watchdogs, the Committee of European Banking Supervisors, the EU regulators’ umbrella body, said the banks – including 27 institutions in Spain, 14 in Germany and six in Greece – would be subjected to a scenario that assumed a 3 percentage point deviation of European GDP from official EU forecasts over a two-year period. FT Alphaville has key features of the tests. Read more
European regulators were locked in heated talks until late Wednesday over the EU’s moves to stress test the continent’s banks, the FT reports. The Committee on European Banking Supervision, the EU’s regulatory umbrella body, was to have published details of its stress-testing exercise early on Wednesday, but the process was delayed by disagreements over disclosure of the stress scenarios, particularly relating to the banks’ sovereign debt holdings. FT Alphaville has the key features of the tests, as finally released. Read more
It’s finally out!
The Committee of European Banking Supervisors has finally released (as promised) the details of Europe’s banking stress tests. Read more