European banks and stress tests...

European banks reportedly need capital infusion of $32 billion. Like Spanish banks sometime ago, Italian banks seem to wobble. Bank capital implies losses in advances made and therefore are holes in bank balance sheets. Since banks borrow and lend to each other, inter-bank impact can be quite worrying. So there is likely to some pressure on bank scrips. Given the fact that Europe has been under duress for over 3 years, this state of affairs is no surprise. There is also a strong suggestion that adequate provisions have been made. But a loss is a loss...Stock markets anywhere must recognize that the ailing continent of Europe has an asset hole which will affect most banks somewhere for sometime...

Fears of a contagion impact might see banks' sell off on Monday early. By afternoon, if Europe is able to withstand, there might be a slowdown in sell off. One hopes that by New York opening time, people look away from banks elsewhere!
So Australian dollar, Kiwi and Yen assets may be gainers early morn and US  assets by afternoon. Asians are followers right now. In Europe the currency to watch tomorrow may be Swiss Franc as investors wait on the sidelines.