The flight to safety following the Fed's decision to extend quantitative easing saw the dollar make big gains against the euro and one strategist said the euro's rally may have peaked for now.
The governor of the Hungarian Central Bank has it worse than most. Not only has the new government placed the blame on him, among others, for Hungary's stagnant economy, it has slashed his salary by 75 percent. The NYT reports.
A week after the authorities released results of stress tests on the largest European banks, market data is starting to provide an indication of whether the exercise had the desired effect on confidence. The answer: sort of. The NYT explains.
Behind the revival in confidence in Greece lurks fear things could still fall apart, the Financial Times reports.
Does the price action on major banks in Europe tell investors that the continent is now not a threat to risk appetite and that Wall Street can mount a sustained rally without a repeat of May’s negative blow-up?
No way only 7 of 91 European banks could pass a real stress test. No way could only €3.5 billion in new capital be needed. When the US tested 19 banks a little while ago, 10 were found to be deficient, and $75 billion in new capital had to be raised. It's ok if everyone at MIT passes every test.
The pan-European stress tests on the banking sector were not tough enough to reflect future worsening conditions for the continent's economy, Nouriel Roubini told CNBC.com.
"There are more problems coming in the currency markets, pension funds, US states and cities, etc. None of this was considered although the latter is only indirect for the European banks," the famous investor told CNBC.com.
One analyst says governments and regulators have missed a major opportunity that will come back to haunt them, even though European stocks advanced Monday on relief over results.
The results of pan-European stress tests released by the Committee of European Banking Supervisors (CEBS) are detailed enough for investors to work out for themselves losses that banks might incur in case of sovereign defaults if they wish, CEBS chairman Giovanni Carosio told CNBC in an interview Friday.
Seven of 91 European banks failed stress tests aimed at measuring their strength in case the continent's government debt crisis takes a turn for the worse, regulators said Friday. European Union officials hope the results will reassure markets worried about hidden bank losses from the crisis.
Most of the largest European banks, are well capitalized but these results "can't begin to tell the full story," Cohen said.
Seven of the 91 banks failed the EU stress test. Here's the country-by-country information.
All but a handful of European banks passed their stress tests but investors remained worried about the methodology, which many viewed as too easy on sovereign debt.
A number of analysts still believe the big stress-test questions need to be answered despite the European Union attempting to draw a line in the sand.
The over-under for the European bank stress tests are 12 out of 91 fail the tests and need capital injections. Unlike the US stress tests, the European tests didn’t tell us the metrics or guidelines before the tests were run. This has generated uncertainty over exactly how these banks are going to perform.
The EU is faced with a dilemma: if the stress tests are too lenient they would lose their credibility and if they are too harsh they would potentially scare investors.
The euro fell sharply after the release of the methodology for pan-European stress tests, as investors still doubt that they will reflect the full extent of the woes.
"They have a huge informal economy. Informal economies don't pay taxes but people eventually show up as they get older looking for pension and looking for health care," Edward Hugh, nicknamed "Europe's prophet of doom," told CNBC.
The results of EU stress tests on 91 banks are expected to be published Friday. Here is some country-by-country information on the banks: