Markets have responded negatively on renewed concern about some European banks’ holdings of troubled European countries’ bonds. The Wall Street Journal reported 7 September that concerns have been raised that the “stress tests” European banks were subjected to in July by the European Central Bank may not in fact have been rigourous enough.

The Euro declined against major currencies and stock markets fell across the board, as new concerns were raised about European banks’ exposure to troubled European countries, like Greece, Portugal and Ireland. Yield spreads of these countries’ bonds over German bonds widened in response. Credit-default swaps on these countries’ bonds – insurance against the risk of default – rose as well.

The price of gold hit an all-time high 7 September of $1257.30 per ounce.

Links to other sites: Bloomberg, Houston Chronicle, The Wall Street Journal

You can leave a response, or trackback from your own site.