Investors wary of the banks – and sell bank shares. Source: AP
HB FRANKFURT. The stock market usually has a good sense of when something is rotten . Just as in the case of the stress tests for European banks. Doubts grow on the results – and bank shares today after giving clear. The French banks are among the biggest losers. Société Générale, Credit Agricole and BNP Pairbas lose about three percent. The British banks Royal Bank of Scotland and Barclays fall by two to three percent. In Dax give the papers to the Deutsche Bank and Commerzbank about two percent after .
After analysis of the "Wall Street Journal " stress tests for the European banking risks from government bond positions in fact have reflected adequately. The European Union had carried out in 91 credit stress tests, the 84 banks had passed.
Financial institutions in Europe to hold more than 134 billion euros in government bonds from Greece, Portugal and Spain , as shown in calculations by Bloomberg. Particularly skeptical investors assess the Greek bonds. Even after the EU and the International Monetary Fund in May agreed rescue plan , investors continue to demand high spreads in Greece bonds. On Friday , the yield on ten-year Greek Staataanleihen was 11.28 percent , compared with 2.34 percent on comparable German government bonds.
A major default could trigger collapses in Greek banks with large positions in government bonds in their portfolios , warns analyst Konrad Becker of Merck Finck & Co in Munich. "A failure in one EU country would let fly the confidence in the banks, " he explained. " If investors are not willing to invest in banks, many banks will go within months , not years of bankruptcy. "
Stress testing only government bonds were considered, which are held by the banks for sale. Papers, which were as reserves in the banks’ balance sheets remained on the sidelines. Government bonds in its reserves , the banks must write off only when there are strong doubts about the ability of the country to repay the loan or the payment of interest. According to a survey by Morgan Stanley European banks hold about 90 percent of their Greek Aleihen in their balance sheets.
The stress tests have not been strict enough , said Julian Chillingworth, a fund manager at Rathbone Brothers in London. "Many investors are not convinced that the Greeks are on the mountain. " And if the Greeks have not yet left the crisis behind them, the same goes for the banks to keep the Greek bonds.
For the banks, suggests the skepticism of investors also reflected in higher yield premiums for bank loans. Several European banks have higher funding costs than its competitors in the U.S.. So the return on five -to ten-year bonds of the French BNP Paribas to 3.83 percentage points above the yield on government bonds. For papers Citigroup is the appropriate charge at 2.75 percentage points, in JP Morgan There are 1.92 percentage points. Both banks are headquartered in New York.
But even from other sources threaten the banks new obstacles. You have to adapt to much more stringent capital rules. The committee responsible for a " Basel III " known rules , represented by supervisors from 27 countries came together on Tuesday in Basel final deliberations on the first , however, were not disclosed.
According to consistent media reports , credit institutions should in future hold at least a core capital ratio of six percent for possible losses. In addition , a buffer is three percent for crises – and, if supervisors require it – nor a counter-cyclical capital cushion of three percent also . To date, the minimum rate was four percent. Background for the aggravation is the global financial crisis that had brought many banks into existential difficulties.
Especially in Germany criticized the new regulations will be loud. Banking associations fear stress in the billions. One consequence is that financial institutions could provide less money for long term loans as of mid-sized companies.