Top financial institutions in Europe have hardly been more vulnerable to an economic tremor, a situation worsened by the collapse of the German credit market as Berlin suddenly stopped issuing new debt.
Europe’s top financial institutions are teetering on the edge of collapse as access to high quality debt products have created a liquidity freeze rendering many institutions near insolvent according to the European Union stress test that assesses each bank’s ability to withstand the shock of a global economic slowdown.
The Bank of England rushed in to reassure global markets that UK lenders remain in a strong position to weather global financial shocks, but the rest of Europe may be in for more than its fair share of turbulence.
The European Banking Authority (EBA), an EU institution, coordinated the test of 51 lenders from across the bloc expressed concern in the wake of the test noting that most of Europe’s banks are not properly situated to withstand a major market event.
