"Most of the banks revealed their holdings of European government bonds for the first time, addressing a key source of market angst."
—-WSJ
As a relatively disinterested spectator in all of this, I’m actually a bit optimistic about the results. The next step is for most banks to stop lending to banks that own too much Greek (or whatever) debt, unless those crappy-asset holding institutions raise new equity capital. Regardless of who passed or failed, or what the regulators say, the other banks should now be able to single out the weak institutions and force them—by eliminating their access to short-term capital—to dilute their obstinate shareholders and become unimpeachably solvent.
Except for the German banks, which seem to have refused to release their sovereign debt holdings. In my ideal world, no one would lend them any money until they released their holdings, and raised any needed new capital.
