While 24 banks failed the stress test, bankers proclaimed the European Central Bank and European Banking Authority’s comprehensive review — perhaps the biggest single regulatory event since the 2008 financial crisis — a deft, credible analysis of the sector, which confirmed it is in a healthy state.
However, even the benign results could not divert investors’ attentions from new and pressing issues. Monday morning’s rally in FIG asset prices ended as soon as it began and by Thursday the Asset Quality Review, the stress tests and all the nail-gnashing they had generated over recent months was all but forgotten as the meagre deal flow now expected to follow the results was overshadowed by the end of quantitative easing in the US and the dire economic situation in Europe.
Bankers play down AT1 pipeline despite relief over AQR and stress test