David Prosser: The stress tests that meant nothing

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The Independent Online

Outlook Among the many mistakes made in the aftermath of the Greek crisis earlier this year, the deeply flawed round of "stress tests" on Europe's banks must surely rank up there with the biggest. These were the tests conducted in July by the Committee of European Banking Supervisors (Cebs) on 90-plus institutions across the EU. Just seven failed, while both Allied Irish Banks and Bank of Ireland passed with flying colours.

Well, just a few months on, Ireland's government is going to have to pump much of its EU bailout cash into these institutions in order to prevent their collapse. It hardly inspires confidence in the rest of the stress test results, or the abilities of Cebs. The whole exercise now looks counter-productive, undermining confidence in Europe's banks, rather than shoring it up.

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