Ignored Greek Default Risk Makes Bank Stress Tests ‘Irrelevant’
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European Union stress tests on the region’s banks are becoming “irrelevant” because they ignore the possibility of a default by Greece.
“Everybody is so concerned about Greece defaulting and the effect that’s going to have on banks, yet that’s not something even being considered as part of the stress tests,” said Jane Coffey, head of U.K. equities at Royal London Asset Management, which manages about $51 billion. “Greece defaulting isn’t exactly a black swan event. There’s a very good chance it will happen.”