"The only function of economic forecasting is to make astrology look respectable"

This marvellous quote from Keynes could equally be applied to the bank stress tests. An illustrious reader of the "View" has asked me if I believe that the market will realise at some point next week that this is another euro con job and will sell off as a result.

The answer to the first part is an unequivocal "Yes". The construction and results of the tests have been common knowledge for some time and the conclusion that they tell us absolutely nothing about the true financial state of European banks is a given.

David Fuller's view Yes, but I maintain that the main benefit of the stress test is psychological. Uncertainty over its release is out of the way and European governments and banks have gained a little more breathing space in dealing with their problems.