Even Moody's downgrade of Irish government bonds on 22 July, which came hot on the heels of a 14-July downgrade of Portuguese debt, has failed to reignite the flames. On Monday, the New York Times published a long article, which documents "how quickly investor psychology has changed." Not only are investors not withdrawing from the eurozone, it appears they are returning - a fact reflected by Greece's successful re-emergence on the debt markets with a 1.65 billion auction of six-month bonds on 13 July. The 4.65% rate of interest the Greek government will have to pay remains high, but it is barely more than the rate it had to offer two months ago, before the announcement of the country's austerity package. Spain, which had been threatened by contagion, also staged three well-subscribed bond sales in July. Bond auctions in Portugal and Italy were equally successful. As a consequence, the European Central Bank (ECB) has been able to cut back on its government bond purchases, after having mopped up 60 billion euros of sovereign debt: a sign that the situation is returning to normal.
Even Moody's downgrade of Irish government bonds on 22 July, which came hot on the heels of a 14-July downgrade of Portuguese debt, has failed to reignite the flames.
On Monday, the New York Times published a long article, which documents "how quickly investor psychology has changed." Not only are investors not withdrawing from the eurozone, it appears they are returning - a fact reflected by Greece's successful re-emergence on the debt markets with a 1.65 billion auction of six-month bonds on 13 July. The 4.65% rate of interest the Greek government will have to pay remains high, but it is barely more than the rate it had to offer two months ago, before the announcement of the country's austerity package.
Spain, which had been threatened by contagion, also staged three well-subscribed bond sales in July. Bond auctions in Portugal and Italy were equally successful. As a consequence, the European Central Bank (ECB) has been able to cut back on its government bond purchases, after having mopped up 60 billion euros of sovereign debt: a sign that the situation is returning to normal.
(LONDON) - Government leaders and the IMF on Saturday hailed stress tests on European banks which failed seven of the 91 institutions checked, but markets remained nervous about the credibility of the exams. The euro fell just after the release of the results but made up the lost ground. US stocks also ended slightly higher but European governments face a nervous wait for markets to reopen Monday to get the full global reaction. German state-owned lender Hypo Real Estate, five regional savings banks in Spain and ATEBank of Greece failed the test of whether they could resist a new financial shock. All have been ordered to recapitalise or take state aid. The Committee of European Banking Supervisors (CEBS), which carried out the tests, said the seven banks would need about 3.5 billion euros (4.4 billion dollars).
(LONDON) - Government leaders and the IMF on Saturday hailed stress tests on European banks which failed seven of the 91 institutions checked, but markets remained nervous about the credibility of the exams.
The euro fell just after the release of the results but made up the lost ground. US stocks also ended slightly higher but European governments face a nervous wait for markets to reopen Monday to get the full global reaction.
German state-owned lender Hypo Real Estate, five regional savings banks in Spain and ATEBank of Greece failed the test of whether they could resist a new financial shock. All have been ordered to recapitalise or take state aid.
The Committee of European Banking Supervisors (CEBS), which carried out the tests, said the seven banks would need about 3.5 billion euros (4.4 billion dollars).
Financial markets have reacted positively to the results of stress tests on 91 of the EU's biggest banks, increasing government hopes that the exercise will restore investors' faith in Europe's financial sector. The value of the euro rose after the publication of the results to reach $1.2916, compared to $1.2892 in late trading on Thursday. The euro had, earlier in the day, fallen to $1.2794 because of concerns that the stress-test exercise would not be sufficiently tough.
Financial markets have reacted positively to the results of stress tests on 91 of the EU's biggest banks, increasing government hopes that the exercise will restore investors' faith in Europe's financial sector.
The value of the euro rose after the publication of the results to reach $1.2916, compared to $1.2892 in late trading on Thursday. The euro had, earlier in the day, fallen to $1.2794 because of concerns that the stress-test exercise would not be sufficiently tough.
