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Geithner Implies European Banks Couldn't Pass US Stress Tests

Delivering Alpha
Photo: Heidi Gutman for CNBC.com
Delivering Alpha

One of the most interesting portions of Treasury Secretary Tim Geithner's interview with CNBC's Jim Cramerwas Geithner's take on European banks.

When asked whether there was a potential for a Lehman-like disorderly collapse, Geithner quickly answered "absolutely not."

But when asked whether "their banks" could pass "our stress tests," Geithner deferred to the market.

"I think you have to look to the broader investor community for an answer," Geithner said.

In other words, Geithner is saying the markets that have been pushing down shares of European banks basically have it right. The European banks need more capital and could not pass European stress tests.

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