Europe ETFs Don't Stress After Tests, But Should Investors? | ETF Trends

The majority of European banks passed a round of “stress tests” aimed to measure their financial system’s durability against economic disasters. But some wonder whether the results would ease the minds of Europe exchange traded fund (ETF) investors who are worried about the stability of the whole euro system.

Only seven of Europe’s 91 largest banks needed more capital to withstand any declines in economic growth or deterioration in sovereign debt issued by Greece, Portugal and Spain, reports Jack Ewing for The New York Times. [Europe ETFs Surge as Economy Shows Life.]

Still, some economists point out that the tests excluded possible circumstances, such as the possibility of Greece or another eurozone country defaulting. European policy makers responded by stating that they would never allow a country to default. [10 Steps to An International ETF Portfolio.]

Bank regulators and Central Bankers assert that the tests were rigorous and fears about Europe’s finances were overblown.