Monday, August 9, 2010
“Stress tests should help, but are not such a game changer,” said Morgan Stanley. “The CEBS stress test result is of limited value to us, as expected by the market,” said JPMorgan. Others agreed. For all Committee of European Banking Supervisors’ protestations, the market’s view is that the parameters of the stress test, particularly using headline tier one capital, rather than the higher quality core tier one number, and its headline results – only 7 out of 91 failing with a €3.5bn ($4.6bn) capital deficit – were “underwhelming”, to cite Citigroup.