28/10/2014
Global markets recorded mixed reactions
European banks shares contrary to the results of stress tests have recorded a negative performance
While Asian stock markets had a mixed reaction to the success of European banks exceeded 106 stress test and 25 banks failed, but European banks stocks bucked expectations recorded a negative performance. The test carried out by the European Central Bank to know the capacity of the financial system in Europe to face the financial and economic crisis like that occurred in 2008 and the global economy hasn't recovered completely yet, represented as an indicator of global stock markets on the strength of the European financial system. Japanese Stock Exchange welcomed the results, closed up 0.6 percent. As South Korea and Australia were closed two stock exchange rising 0.3 percent and 0.9 percent respectively. And the Chinese stock exchange outside gradate Squadron concluded the Hong Kong stock exchange and Shanghai traded down 0.8 per cent and 0.5 per cent.
European stock markets began rising, welcoming the result, prompting some major investors like new Smith to banking shares disposed of, before the rates start to decline. He said for the ' economic ' Gary Miller, analyst at the London Stock Exchange, ' the result looks attractive, but who can trust in time everyone knows that most countries in the euro zone and the European Union are facing a severe economic crisis '. Unlike the Italian and Greek banks deemed the biggest loser from the health and safety test, carried out by the European Central, the sense of confidence and optimism dominated British banks, after four major banks exceeded the test long 130 European Bank, focusing on the ability of banks to cope with the sharp rise in unemployment, lower growth rates, assuming that this negative situation will continue for three years.
The result that 25 banks failed in the test exceeded European, four British banks, however, President (Lloyds, Royal Bank of Scotland, Barclays, HSBC) succeeded to varying degrees in the past, to show an ability to face any financial crisis hitting British capitalist system as of 2008. The Royal Bank of Scotland, one of the British banks that have undergone this test has passed though many doubts in his ability to challenge the Government own about 80 percent of its shares. Lloyds managed banking group which British taxpayers owns nearly 25 per cent of its shares in the test well. He said for the ' economic ' Charles Thomas Executive Director at Royal Bank of Scotland, ' the result announced by the European Central Bank reiterates confidence again for the British financial system after an economic crisis, and that the financial reform measures adopted in the last three years successfully, which qualifies the British banks to play a greater role in the advancement of the economic system.
But the Bank of England has adopted more stringent standards of European standards, where a ' scenario ' visionary real estate prices back down to 35 percent, and the high interest rate to 6 per cent, which many financial experts in Britain that applied at the moment means many banks failed in meeting them. The Bank of England issued a statement explaining the situation saying, ' it is important to note that the flexible banking test results set by the European Central Bank is not a substitute for testing the Bank of England '. He said for the ' economic ' William Jones in the financial policy Committee of the Bank ' the European test considers, but the first important test does not cover selections that can face the British financial system.
Added to this, the application of the testing standards of flexibility given by the Bank of England might backfire test showed European Central '. However, British banks tested exceeded the flexibility does not mean that its plan for financial reform had reached the target, for example due to Lloyds banking group on its plan to terminate the services of 9,000 employees, and closing many bank branches in Britain. However, the positive nature of the test results the European Central, flexibility does not mean that ' time ' and future challenges are the governance chapter in the ability of banks to cope with any future economic crisis, particularly in the atmosphere of pessimism which now dominates the economies of the euro zone; they are heading to a new round of recession.
