Will Europe

Before European regulators released the results of the
banking “stress tests”, which were designed to test whether Euro-zone banks
were healthy enough to withstand economic shocks, Goldman Sachs (NYSE:GS)
estimated that European banks probably needed to raise somewhere in the
neighborhood of 38 billion euros to shore up their balance sheets and offset
non-performing loans.

Barclay’s went for a much more expensive neighborhood, at 85
billion euros.

So it might have seemed like good news when European bank
regulators announced that only 7 of the 98 banks that received stress tests
came up with failing grades. What’s more, it would only take 3.5 billion
euros to change those “Fs” to “Ds” or “Cs”.

It sure looks as though European banks were not as bad off
as we thought…

As I wroteon
Friday, the stress tests that the U.S. Treasury conducted last year was more
about giving investors confidence than truly exposing any vulnerabilities. No
big U.S. banks failed. But
still, Geithner forced U.S. banks to raise
$75 billion to improve their balance sheets. You know, just in case