Sure, it’s the cheap, easy, cynical view to adopt that the bail-out/splintering of the French/Belgian/Luxembourgish bank Dexia, worked out over the weekend, is just going to be the first of many such episodes. Then again, it’s also the de rigueur statement for any finance minister involved to make under such circumstances – “No, I don’t think so, certainly not French banks” – such as that which French finance minister François Baroin uttered when asked by reporters if there would be any others.

Of course there will be others. For heaven’s sake, there were already two others (i.e. European bank nationalizations) happening even as Dexia hogged the headlines the past few days. (Details here, in English: namely a Greek bank – surprise! – that was nationalized after getting in trouble over money-laundering, and a Danish bank that made foolish real estate loans.) And now we have further explicit confirmation of this from Kleis Jager at the Dutch newspaper Trouw: French prepare in secret for more misery.

Topped by an unfortunate photo of current (unelected) Belgian Prime Minister Yves Leterme and France’s PM François Fillon with sly, conspiratorial smiles on their faces, Jager’s piece tells of how, even before Dexia, the French government realized that it needed to get ready to save at least “two or three” big banks – preferably by forcing them to sell themselves to outsiders with big money.

(Just as Luxembourg did with its part of Dexia, selling it to the Qataris, for example. You’ve got to admire the Luxemburgers, though – on the very Sunday (9 October) that Dexia was collapsing, finance ministers were feverishly meeting, and Qataris were presumably being wined-and-dined, they were also holding their national elections!)

Wait, you want names? No problem: according to Trouw, the French had in mind specifically BNP Paribas, Société Générale and Crédit Agricole as the banks where they would need to intervene. No Dexia on that list! But all of these have done good business through the years – “good” so far – providing loaned money to not only Greece, but also Spain and Italy.

To be fair, this is not Jager’s scoop, but rather one he credits to the French paper Journal du Dimanche. BNP Paribas and Société Générale immediately issued denials once the latter had published its report. But I refer you again to Finance Minister François Baroin’s comments cited above.

Sorry: this has nothing to do with doing-over the financial crisis of late 2008-2009 to get another chance to deal with it right, even only as it hit Belgium. Rather, I noticed from a piece by Bert Broens in that nation’s business newspaper De Tijd that two of the biggest domestic banks, KBC and Dexia, will have undergo so-called “stress tests” all over again right after they thought they were done with all that.

What these “stress tests” are all about is an auditing exercise whereby banks’ balance-sheets are subjected to a standard scenario positing a business downturn, meaning theoretically that more people would not be able to pay back their loans, there would be lesser demand for new loans, and the like, and so you see how the bank would do in such a situation – first of all whether it would even stay solvent and so survive (at least without receiving some sort of state aid). And, as stated, both these Belgian banks already did the exercise and came through it with OK results. But the whistles have sounded and the competitors are being directed back to their starting-blocks to do it all again, and for a good reason: those previous stress tests did not include checking for any situation in which government bonds held by the banks might not be fully repaid. That’s rather an important omission: we’re talking in particular Southern European (or PIGS, if you like) government bonds here, and KBC Bank alone has €60 billion worth of them in its portfolio.

How then could anyone have considered the previous stress tests, which did not account for those public obligations, anything but a waste of time? Well, many cynics (or call them analysts) have felt that the real purpose of such tests was in the first place as a propaganda exercise meant to return a comforting “All OK!” for each such bank tested to calm investors’ and markets’ fears. This whole “stress test” idea was taken over in the first place from the American financial authorities, who performed them on the big American banks in spring-summer of last year, and ongoing coverage particularly from the Naked Capitalism financial weblog not only blew the whistle on that American exercise but also has found serious flaws in the European stress tests happening now. In fact a major complaint (also put forward in a related financial blog here) about the validity of the European tests was their alleged failure to take into account such sovereign risk.

Broens’ piece shows that that at least is not happening in Belgium, although he doesn’t say why, like who decided to make these exercises a bit more bona fide and call back KBC and Dexia to do them “right.” His language is in the passive tense – “in the meantime it has been decided to expand the test” – although one first guess would have to be the Belgian financial authorities.

UPDATE: A new entry on Naked Capitalism tacitly concedes that these European “stress tests” will in fact include banks’ exposure to sovereign debt in their calculations. It then goes on to sketch the great worry resulting from that: What happens when these more-honest tests reveal that too many banks in fact stand in need of more capital, possibly from governments which in many cases are no longer in a position to provide the same?