Yesterday’s European Banking Authority (EBA) stress test was supposed to restore
confidence in the euro and Europe’s beleaguered financial institutions; it has had the opposite effect. Investors and market analysts are preparing for ‘Black Monday’ after only 8
banks failed the test and must now raise £2.2 billion between them to stave off ruin. A respected estimate by Goldman Sachs expected at least 15 banks to fail, requiring £29 billion to
recapitalise.
As the Spectator’s business blog reported yesterday, analysts feared that the EBA’s test would not be sufficiently stringent, and so it came to pass. The findings have served only to undermine confidence in institutions across the continent, many of which are perfectly healthy. Those British analysts who have gone on the record sound a clear note of fury. “If the European Union could monetise the value of the credibility it has destroyed it would be richest organisation on earth,” one fund manager told

Britain’s best politics newsletters
You get two free articles each week when you sign up to The Spectator’s emails.
Already a subscriber? Log in
Comments
Join the debate for just $5 for 3 months
Be part of the conversation with other Spectator readers by getting your first three months for $5.
UNLOCK ACCESS Just $5 for 3 monthsAlready a subscriber? Log in