Why Germany may change its mind on ECB easing

Europe banks upping capital raising: Pros
Europe banks upping capital raising: Pros   

News hit last Thursday that Espirito Santo Financial Group, whose primary asset was a 20 percent stake in the Portuguese bank Banco Espirito Santo, had declared bankruptcy -- and not a moment too soon. The following day the European Banking Authority (EBA) announced that Sunday October 26 would be the official date for the release of the EU bank stress test results.

Lately a number of my guests have been suggesting buying European banking stocks on the dip, especially as lenders could become beneficiaries of further European Central Bank measures aimed at ensuring liquidity and lending.

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Law firm Linklaters released research Monday in which they examine how much capital banks have been raising to pass the upcoming tests.

David Ereira, Banking Partner at law firm Linklaters came on "European Closing Bell" to talk through some of the main findings.

Read MoreWhere did the German 'strongman' go?

First, 42 percent of all new capital raised since the last stress tests was raised this year. However, some countries, like Cyprus, Austria, Greece and Portugal, all raised significantly more in 2014 (between 53-74 percent).

Second, in raising more than 10.5 billion euros ($13.2 billion) this year, Italian institutions account for the biggest recapitalizations, followed by Greece (8.5 billion euros), Germany (6.7 billion euros) and Portugal (3.4 billion euros).

German recession fears
German recession fears   

Third, some banks could still fall short of capital. Just over a quarter, 25.5 percent, of the 66 banks in the least capitalized areas were able to successfully raise capital in 2014. Under half of these banks accounted for three quarters of all the capital raised.

Read MoreUBS Chairman: Don't give Germany the wrong diagnosis

In other words, a number of banks in the weaker districts still struggled to raise money. Finally, in total, 32 percent more capital has been raised so far this year than in the entire year before the last stress tests.

Germany may change its mind

The bigger point is still that you have to have a healthy financial sector, or it gets very difficult to have healthy broader markets.

Speculation continues that the ECB may, in fact, want to introduce full-blown quantitative easing (buying European sovereign bonds), but that ECB President Mario Draghi's hands are tied by German Bundesbank officials who don't want to mop up the bill for Europe.

Read MoreGerman industry output plunges most in over 5 years

However, this "Germany on one side, Europe on the other" attitude could be changing.

German data has been pretty awful lately. German exports dropped 5.8 percent in August. German industrial production fell by 4 percent in the same period. And, given German growth having contracted by 0.2 percent during the second quarter, you have to question: if Germany falls into recession, will this force Bundesbank officials to change their attitude?

In other words, see the weakness continue for powerhouse Germany, and they might be asking for more ECB support instead of opposing it.

- Louisa Bojesen is the presenter of CNBC's European Closing Bell, Monday-Friday 4-5 p.m. BST. Follow Louisa on Twitter @louisabojesen.