90 seconds at 9am: Europe to release bank stress tests; Henderson's Hotel SO into receivership

Europe to release bank stress tests; Henderson's Hotel SO into receivership

 Bernard Hickey details the key news overnight in 90 seconds at 9am in association with the BNZ, including news the European Union has agreed to release the results of stress tests for Europe's 25 largest banks.

The move, which was opposed by the Germans, is designed to reassure financial markets that the biggest banks are stable. Spain was the main driver for the release of the stress tests as many other banks in Europe and elsewhere have stopped trusting Spanish banks, fearing their exposure to Spain's imploding property market could bankrupt them.

Spain wanted to release the stress tests to show its two biggest banks, BBVA and Banco Santander are safe. The Germans are worried that the weakest of the Top 25 will be targeted by markets. However, the stress tests will not be released until July and they do not give any reassurance on those banks outside the Top 25, including Spain's Caja building societies and Germany's Landesbankens.

Those inside the top 25 that operate in New Zealand include Rabobank, HSBC and Deutsche Bank.

This news boosted financial markets in late trade overnight, boosting the Dow and helping lift the New Zealand dollar to a one month high of 70.3 USc. The New Zealand dollar has tended to follow the Dow in recent years, given the Dow is a crude measure of global investors' appetite for risk and the New Zealand dollar is seen as a riskier currency that is exposed to volatile commodity prices. They tend to move sharply on expectations about global growth.

Meanwhile in Christchurch, property developer Dave Henderson's boutique Hotel SO has been put into receivership overnight. Henderson, who battled the IRD during the 1990s and was made famous in the book/movie 'We're here to help', bought the Hotel building and kicked out the then tenants, the IRD.