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The Eurozone Bank Stress Tests are a farce: AIB and BoI set to pass


Cassandra Syndrome

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Aug 23, 2009
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This is beyond a joke. THese rancid corporations wouldn't pass a treadmill at 1 mph stress test they are that ill, but not in the world of the Eurocrats. Just keep them open and extracting the real wealth from the people and feed our interest of the bloated ECB balance sheet.

At least we know for sure the whole thing is a con.

Bank of Ireland, Allied Irish Said to Pass EU?s Stress Tests - Bloomberg.com
 

A view from England

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Apr 14, 2010
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2,077
This is beyond a joke. THese rancid corporations wouldn't pass a treadmill at 1 mph stress test they are that ill, but not in the world of the Eurocrats. Just keep them open and extracting the real wealth from the people and feed our interest of the bloated ECB balance sheet.

At least we know for sure the whole thing is a con.

Bank of Ireland, Allied Irish Said to Pass EU?s Stress Tests - Bloomberg.com
http://www.bbc.co.uk/blogs/thereporters/robertpeston/2010/07/europes_dangerous_contempt_for.html:lol:
 

grafter1

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Apr 1, 2010
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The European stress tests require Tier 1 capital of 6%. Elderfield has insisted on AIB and BOI having 8% by January 1, 2011.

It's no surprise they'll pass - the stress tests don't appear to be too stressful!
 

Migrant Dub

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Jul 15, 2009
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This is beyond a joke. THese rancid corporations wouldn't pass a treadmill at 1 mph stress test they are that ill, but not in the world of the Eurocrats. Just keep them open and extracting the real wealth from the people and feed our interest of the bloated ECB balance sheet.

At least we know for sure the whole thing is a con.

Bank of Ireland, Allied Irish Said to Pass EU?s Stress Tests - Bloomberg.com
have they not passed these already?? did they not pass something last week? some form of stress test?
 

Cassandra Syndrome

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The European stress tests require Tier 1 capital of 6%. Elderfield has insisted on AIB and BOI having 8% by January 1, 2011.

It's no surprise they'll pass - the stress tests don't appear to be too stressful!
In my opinion the only ratio that counts is the Texas ratio. The BIS Tier mallarkey can still allow toxic assets.
 

controller

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Feb 25, 2009
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In my opinion the only ratio that counts is the Texas ratio. The BIS Tier mallarkey can still allow toxic assets.
I had to check what this is

The Texas Ratio is a way to measure how risky a bank is. The formula tells you how likely the bank is to be dragged down by bad loans. By looking at Texas Ratios, you may be able to spot banks that are more likely than others to fail.

Texas Ratio - How the Texas Ratio Bank Rating Works
 

HarshBuzz

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let's just wait and see what the tests say, shall we? sheesh
 

Cassandra Syndrome

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What he's talking about there is exposure to greek sovereign debt, which AIB and BOI have little if any exposure to.

CS Tier 1 is hard cash. It can't be "toxic" assets.
Tier 1 is core capital and not mere cash. There are different weights involved. Unsecured loans are 100%, mortgages are 50%, Bonds are 25%. So if the test is 6%, then mortgages a lot of which are toxic require just 3% core capital.

As for hard cash ratios, fractional reserve banking used to based upon 10:1 deposit: cash ratio, most banks range from 20 uo to 130:1.
 

Mossy Heneberry

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Jun 10, 2009
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3,841
This is beyond a joke. THese rancid corporations wouldn't pass a treadmill at 1 mph stress test they are that ill, but not in the world of the Eurocrats. Just keep them open and extracting the real wealth from the people and feed our interest of the bloated ECB balance sheet.

At least we know for sure the whole thing is a con.

Bank of Ireland, Allied Irish Said to Pass EU?s Stress Tests - Bloomberg.com
Cass don't you see, that proves the stress test has failed when the likes Of AIB and BoI pass.
 

SideysGhost

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Nov 30, 2009
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As for hard cash ratios, fractional reserve banking used to based upon 10:1 deposit: cash ratio, most banks range from 20 uo to 130:1.
Up until Basle II in the mid-80s, which I personally would point the finger at as the primary, original root cause of all this banking chaos.

IIRC in 2008 before the crisis became Official the average ratio for Eurozone banks was 50:1 :eek:
 

seanmacc

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Jan 10, 2009
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1,022
So our banks are in great shape?

This is fantastic news. Maybe they can now start paying the money back to us we pumped into saving their asses. Or maybe they can stop increasing mortgage rates and crippling our already crippled families.

Little bit of a farce alright.
 

Cassandra Syndrome

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Aug 23, 2009
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[video=youtube;T_yDWQsrajA]http://www.youtube.com/watch?v=T_yDWQsrajA[/video]
 
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