Economist: Soccer Indicator Better than Stress Tests

Forget about stress tests as a way of gauging the health of Europe's banking sector. Instead you should look to the biggest-spending soccer team, according to Jim O'Neill, chief global economist for Goldman Sachs.

Spanish Banks Key to Tests

"I kind of developed my own test," O'Neill told CNBC Wednesday. "If Real Madrid can't dominate the European transfer market, that's a sign of stress."

"I'm semi-joking but that's the kind of thing to look out for," he added.

- Watch the full interview with Jim O'Neill above.

Real Madrid is famous for spending top-euro to buy players from other clubs, which is the predominant way players move from club to club in professional soccer, compared with trades in US professional sports.

The club spent 94 million euros last summer just to buy one player — prizing Cristiano Ronaldo away from Manchester United.

If Real Madrid starts to have trouble finding funds from Spanish banks, that's a sign that the banking system really has a problem, O'Neill argued.

O'Neill is no stranger to soccer. He is one of the Red Knights, a group of investors that is looking to buy Manchester United from its current owners, the Glazer family.