Learned Swiss gnomes face arm-twisting from panic-stricken Eurobanks

European banks led by the majors in France and Germany are putting ‘heavy’ pressure on the Swiss authorities to water down the Basel agreement on viability measurement, The Slog has learned. As I have this from two entirely separate sources, I think we can assume that it’s ‘out there’. Watch for Eurospin getting into top gear as Trichet and his robots try to explain away what is an obvious attempt to nobble the stress tests.

One source based in Madrid comments: “This is a complete U-turn from where Sarkozy and Merkel were just four months ago. The politicians are running scared, and common sense says they’re doing this because the news from the banks themselves isn’t good. There is no other explanation for this move”.

Meanwhile, following the ECB’s unsubtle attempt to depict black as white yesterday, leading credit agency Moodys reacted by dropping Portugal’s credit rating two whole levels to A1. Our Spanish source told The Slog that he expected similar moves downward for Spain in the immediate future.

German investment opinion leaders are also sceptical of Trichet’s balm. The EU’s Economic Research Centre (ZEW) reports this morning that its confidence index for Germany plunged 6.5 points to 21.2. Most economists had expected a new level no lower than 25.3