European Banks Not As Well Off as Stress Test Suggested

After recently wrapping up a round of stress testing on European banks in October, the European Central Bank determined that most banks would be able to brave a decline such as the recession of 2008, or worse.  Unfortunately, after looking at the stress test parameters, analysts determined that European banks maybe are not as safe as previously thought, in the event of a downturn.  According to the Danish Institute for International Studies, the ECB did not take into account new leverage minimum rules that will go into effect starting next year.  The new bank law requires that banks have 3% of total assets (aka leverage ratio) in cash to help take some of the risk off and stabilize the...