Courtesy of Mish.
In an effort to fool the public into believing the latest round of bank stress tests were actually designed to find stress, the ECB found 25 scapegoats, with the biggest losers in Italy and Greece.
Interested parties may wish to slog through the full 178 page Stress Test Report.
Capital Shortfalls
Non-Performing Loans
Here’s a chart from PDF page 75 (report page 67) with thanks to ZeroHedge.
There is €879 billion in nonperforming loans but the report concludes bank assets are only €48 billion overstated. Apparently we are to believe there are adequate loan loss provisions for rest.
Reuters reports ECB Fails 25 Banks in Health Check but Problems Largely Solved.
Roughly one in five of the euro zone’s top lenders failed landmark health checks at the end of last year but most have since repaired their finances, the European Central Bank said on Sunday. Italy faces the biggest challenge with nine of its banks falling short and two still needing to raise funds.
“This seems as if it has been pretty unstressful,” said Karl Whelan, an economist with University College Dublin.
“The real issue is the size of the capital shortfall and that is very, very small. I don’t feel a whole lot more reassured about the health of the banking system today than last week.”
€48 Billion Shortfall
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