Video: Nouriel Roubini on the U.S. & Global Economy -- July 26, 2010
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Video: Roubini laughs at the European banking stress tests -- July 26, 2010
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The pan-European stress tests on the banking sector were not tough enough to reflect future worsening conditions for the continent's economy, Nouriel Roubini, economist and chairman of Roubini Global Economics, told CNBC Monday.
European stress tests assumed a rise of 6 percent in unemployment, economic contraction of 3 percent on average and a 6 percent hike in market interest rates. Many analysts said the conditions were harsher than what they had anticipated.
"The assumptions made about economic growth, about sovereign risk are not realistic enough," said. Roubini, who was dubbed by the media "Dr. Doom" but prefers to be called "Dr. Realist."
Plus, most of the sovereign risk was held in maturity books and the tests did not allow for a default, he added.
Roubini greets his fans.