Stress Tests A Conditional Thumbs Up For Dealmaking?

Europe came back into focus this week with the announcement of the results of the stress tests upon the banking sector. Despite the fact that only seven of the 91 EU banks tested failed to meet the required Tier 1 capital ratio, giving the industry something of a conditional thumbs up, we caution that the results are unlikely to provide a major and sustained boost to capital markets. Indeed, the big picture for Europe remains unchanged: weak demand, low inflation, and low rates.

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