LONDON—Europe's recent "stress tests" of the strength of major banks understated some lenders' holdings of potentially risky government debt, a Wall Street Journal analysis shows.From Calculated Risk:
After the WSJ story last night on the European stress tests, here is an update on a few European bond spreads:
The 10-year Ireland-to-Germany bond spread has risen to 376 bps. This spread is larger than during the financial crisis in May when the spread peaked at 306 bps.
The 10-year Greece-to-Germany bond spread is now 946 bps, just below the peak level of 963 bps in May.
The 10-year Portugal-to-Germany bond spread is now 351 bps, just above the peak in May of 349 bps.