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The European Banks Solvency test

The leaks are out, and most of the 26 banks that are in in need of immediate capital (and maybe require too much capital to remain solvent.  Some names are obvious:  Irish banks and insurance companies, others are suprising; WestLB and Bayerisher Landesbank.  That the second tier Portuguese and Spanish banks are in trouble is no surprise, and obviously the "prime" Irish banks are on the list too.  The European central bank investigated the risk associated 91 European banks and found 26 in trouble.  Also included in one of the two Cypriot banks (surprisingly not both!)

What is amazing is that on the base case scenario the shortfall is around Euro 45 billion (for the Spanish institutions) but it is Euro 119 billion if the stress test is employed.  That's a lot of money!

See the Zero Hedge article.

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