Saturday, 16 July 2011

'Chaos Monday'?

European banks failing stress tests and Euro crisis concerns may cause a chilling reaction in the markets on Monday.

Harry Wilson and Phillip Aldrick from The Telegraph believe that there will be chaos on the markets as investors and analysts claim that the stress tests were over optimistic and inadequate. Emma Rowling (also from The Telegraph) reports that global equities could lose up to 38 percent of their value at the most extreme prediction or 12 percent at a much milder prediction. are also predicting a 'horrible trap' ahead for investors.

One things for sure - I'll be keeping my eyes wide open on Monday!


Friday, 15 July 2011

8 Banks Fail Stress Test

Out of 91 banks the European Banking Authority found 8 banks lacking the means to avoid another financial crisis.

The Telegraph notes that 5 Spanish banks, 2 Greek Banks and 1 Austrian bank had failed.

This news, coupled with their other findings of 16 banks in the 'danger zone, is very worrying for the banking industry.



US Government Debt Rating In Question

Credit rating agencies are currently reevaluating the AAA debt rating of the US government. Moody's and Standard and Poor have both announced that they may downgrade the rating.

What will this result in if they are cut? I hear you ask. Well, if these rating agencies downgrade the investment grade on the US government there will be several repercussions:

-Firstly it will cost the US government more to borrow money
-It will decrease investor confidence in government bonds
-And lead to an overall negative effect on the US economy

Kind Regards,

Bank Stress Tests

Ten European banks have been tested by the European Banking Authority and results are to be published later today. In total 90 banks are being tested including Lyold's Banking Group and the Royal Bank of Scotland.

These tests are a more hardened version of the previous stress tests after there were concerns that they were not testing enough.

Banks will be required to publish their sovereign debt exposure to the public and then for the public to come to their own conclusions about the data and to the strength of the banks.

Stay tuned for a quick update on these results later.

Kind Regards,