Well that didn’t take long did it? I only mentioned that the market may start to get edgy about the ECB bank reviews earlier this morning and up pop these guys.

Roger Francis is an analyst at Mizuho and he’s worried about the speed that BES went from announcing problems to the Bank of Portugal stepping in with the resolution fund. He points to the BRRD and ECB’s comprehensive bank assessments that assume there would be enough time for capital reconstruction in cases like this and says that the BES case shows that this may not be the case.

On the whole he sees the current action by the BoP as a positive both for senior debt holders who have been spun of with the good part of the bank.

This issue is going to really bring more attention on the bank tests and reviews and people are going to question whether they are going to be enough to stop problems like this. As CreditPhil noted earlier in the comments it may be that the tests wouldn’t have highlighted this problem anyway. If that’s the case then they’re going to be half useless as a protective tool.