Since we know Germany has no plans to allow the ECB to bail out countries, there seems little hope for European banks that own lots of sovereign debts from countries under siege. So if you can find ways to short European banks, this may be a good trade. We own puts on Deutsche Bank (DB)and Barclays(BCS) The weakest ones are the French banks but there are no ADRs to trade.
Federal Reserve Chairman Ben S. Bernanke told Republican senators the Fed plans no additional aid to European banks amid the region’s sovereign debt crisis, according to two lawmakers who attended the meeting.Senator Bob Corker, a Republican from Tennessee, said Bernanke made it “very clear” in closed-door comments today the central bank doesn’t intend to rescue European financial institutions. Lindsey Graham, a South Carolina Republican, said Bernanke told lawmakers that “he doesn’t have the intention or the authority” to bail out countries or banks. Both senators spoke to reporters after leaving the one-hour session at the Capitol in Washington.
via Bernanke Tells Senators Federal Reserve Has No Plan to Aid European Banks – Bloomberg.