by Mike ‘Mish’ Shedlock
European bank shares are down for the second day following a last minute bailout package aimed at Italian banks one day before a stress test showed Monte dei Paschi would be insolvent in an adverse scenario.
The ECB’s stress tests published on Friday showed Monte dei Paschi has a huge capital shortfall, with the bank’s Common Equity Tier 1 (CET1) ratio of negative 2.44 percent.
Forget the adverse scenario bit, Monte dei Paschi, Italy’s third largest bank and oldest bank in the world is insolvent in any realistic scenario.
On ZeroHedge provided the Full Details Behind Monte Paschi’s €5 Billion Bail Out but the short synopsis is the same as ever: It cannot possibly work.