Investors voice concerns about Europe's stress tests on banks

07/6/2010 | Bloomberg

Stress tests on US banks last year helped reassure financial markets, but Europe's plans to assess its banks continue to face significant challenges. Investors are concerned that banks might be hiding troubled loans or not have enough capital to withstand sovereign-debt defaults. They are also worried that governments would not be able to afford to come to banks' aid. "There won't be a rebound in European banks unless we have stress tests," said Dirk Hoffmann-Becking, a senior research analyst at Sanford C Bernstein. "But stress tests won't resolve the sovereign-debt crisis."

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