what could spoil the party?, page-20

Axel Weber, former head of the German Bundesbank and now chairman of UBS, has been a party pooper early at the World Economic Forum in Davos, with a harsh warning on ECB stress tests. He said the European Central Bank’s stress test for banks in November “risks setting off a new sovereign debt scare, reviving the crisis in the Mediterranean countries”:

“Markets are currently disregarding risks, particularly in the periphery. I expect some banks not to pass the test despite political pressure. As that becomes clear, there will be a financial reaction in markets.”

Danger is that bank strains will turn the spotlight back on those sovereign states that cannot easily afford to shore up their banking systems (a big shout out to Spain, Italy, and Portugal).

Read more here;

Crippled eurozone to face fresh debt crisis this year, warns ex-ECB strongman Axel Weber

http://www.telegraph.co.uk/finance/financetopics/davos/10590134/Crippled-eurozone-to-face-fresh-debt-crisis-this-year-warns-ex-ECB-strongman-Axel-Weber.html

Axel, what a party pooper!