Date: Thursday 08 Jul 2010
European shares had a good day as banks came back in to favour as the new stress tests proposed by the European Union were considered lenient.Meanwhile, the European Central bank and Bank of England both left interest rates unchanged.
Most of Europe’s biggest banks are on a list to be 'stress-tested' by the European Union to measure their ability to withstand another major financial shock in future, but nearly all are expected to sail through.
No details of the exact conditions were released, but market reports suggested the EU is looking at a scenario of a possible 16-17% drop in the value of Greek and other sovereign bonds.
Societe Generale, BNP Paribas, Credit Agricole, Deutsche Bank and Commerzbank are among 91 banks selected by the EU to face scrutiny, a much greater number than originally expected.
The EU’s Committee of European Banking Supervisors said collectively the banks represented 65% of the European Union's banking sector. They account for at least 50% of the banking sector in their respective countries.
Yesterday, the European Parliament voted to implement tough new rules curbing bonuses for bankers and traders in Europe from next January.
Credit Suisse upped its view on the European banking sector to market weight from underweight.
Across the markets, the Dax in Frankfurt is 42 points at 6,035, while the Cac in Paris gained 54 points to 3,538.Elsewhere, the International Monetary Fund upped its forecast for global economic growth this year to 4.6% from its preliminary forecast of 4.2%.
No comments:
Post a Comment