European banking sector bounces in early trading
Despite the fact that the Spanish banking sector was hardest hit by the European Union stress test, released into the public domain last Friday, there was a rebound in share prices with many pessimistic forecasts blown out of the water. While there is no doubt that everything was not perfect with regards to the EU stress test there is also no doubt that things are not as bad as many people had predicted.
There were a handful of European banks which failed the stress test although remedies are being sought to increase their capital provisions and their asset backing. It was interesting to see that despite the turmoil in the UK economy and the recent turmoil in the UK banking sector, UK banks performed relatively well in the EU stress test. The share prices of Barclays, Royal Bank of Scotland, Lloyds bank and HSBC are all up in early trade on relief that the situation appears to be a little more stable than many had feared.
Even though the EU did not release all of the data with regards to the stress tests, and instead chose to issue headline figures, the situation could have been far worse and we could have seen the European banking sector in turmoil this morning.
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