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ClimateNE & Climate Change Schools Project support the move to a low-carbon, resilient economy and help businesses avoid risk and realise commercial opportunities. Posts by Jen Atkinson, Krista McKinzey and Harriet Thew » Cash-strapped Teesside firms won't be celebrating the dubious 'achievement' of Britain's big four banks passing Europe's much-hyped stress-tests.
Designed to reassure investors over the health of Europe's financial sectors, the exercise was a box-ticking formality for RBS, Lloyds, HSBC and Barclays, which had already faced much tougher scrutiny from the Financial Services Authority (FSA).
Passing these national and European exams will not mean that banks will open the lending vaults to business.
If anything it will do more to prohibit lending, as banks look to maintain or improve the health of their balance sheets by hoarding spare capital.
The lending crisis has been hovering over the high street since credit markets froze in 2008 - and shows little sign of going away any time soon.
Latest figures from the British Bankers' Association show that in June, net lending to non-financial companies fell by ã1.1bn on the same month in 2009.
The association claims the market is "subdued" due to firms' lack of appetite to take on extra debt. But bosses claim that lending terms are being made far too prohibitive.
The stress tests will not break this paralysing stasis, nor will they do much to calm investor nerves about Eurozone defaults on sovereign debt.
Regulators have ordered banks to hold sufficient capital to withstand a fall in the price of sovereign debt. But they have not factored in the worst-case scenario that European governments could default on these debts.
If they had, it's a fair bet that more than seven of the 91 banks would have failed the tests.
Analysts have already voiced concerns that the results are a red herring because the tests themselves lacked sufficient rigor.
In that context, the move to reassure investors that financial markets are in good health could have the opposite effect.
And if the measures were designed to ensure banks would never again get into the mess that wrecked financial systems in 2008, they have failed spectacularly in that mission.
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