Europe has reviewed their financial systems

Europe has reviewed its financial system. The results of stress tests presented on Friday July 15 are a revalidation, following the review of European banking happened just a year ago. That test has been criticized on several fronts, casting doubt on its validity.

Among other issues, one of the main complaints to the review methodology addressed the treatment had been given to sovereign debt held by the entities. The scenarios provided in the 2010 test did not contemplate the possibility of a default, which was unconvincing for much of the market.

On this occasion, the authorities have not raised the possibility of a sovereign debt default inthe, however, have sought to strengthen the transparency and credibility of the evidence showing in detail the exposure of each of the entities examined to sovereign debt, both those classified as available for sale, as situated in the portfolio at maturity.

Certainly it was a possibility to consider, given that Germany constantly asks banks to shoulder some of the bailout of the most weakened, as is the case of Greece. Claim that will increase as you increase the number of countries demanding help.

Spain has made "an additional exercise of transparency" in the words of one second vice president and Minister of Economy, Elena Salgado, to demonstrate that the financial system is not as bad as some suspect. Examination of Spain, moreover, is more extensive, the data published more than 95% of its financial system, and entered in more ways than the rest of Europe. Thus, the data will be released in more detail in terms of assets and losses. Also, credit to households has distinguished between mortgages, with fewer problems of defaults, and consumer credit. The reason for this are the doubts that generates the largest Spanish financial sector exposure to the deterioration of real estate.

It must be mentioned, although it may be the result of chance, that in our country traded entities that further the known swaps, or contract interest rate swap are those who do worse. It will be clear chance ... or reproach?