The Franco-Belgian bank Dexia is faces restructuring.
The Franco-Belgian bank Dexia is faces restructuring. - 
Listen To The Story

An important European bank is in deep trouble and could get broken up by the French and Belgian governments this week. Here's the kicker: Dexia is in a fight for its life just three months after Europe put it through a so-called financial stress test and the bank got a passing grade.

Dexia has a lot of government debt on its books from Greece and other countries and the stress test didn't put enough weight on the chance that sovereign stuff might not get paid back.

We spoke with Gerard Cassidy at RBC Capital Markets. He says from time to time, the world gets a reminder that countries can in fact default. And that's the thing; sovereign debt is often viewed as a sure-thing, no-default investment. But that doesn't really fly today when markets price Greek debt in a fashion that says: "We're sure they will default."

And Cassidy says that was the problem with this summer's European financial stress test: it simply was not tough enough. The sovereign debt problem didn't factor enough in the test. Cassidy says that the U.S. did it much better in two ways. The American stress tests were tough in themselves. Plus, the government made sure banks had the capital to pass them via the Troubled Assets Relief Program, or TARP.

Cassidy is looking for similar things from Europe: a tougher test that may, yes, reveal severe problems in the European bank system. But he says that's why European authorities need pre-promise a huge stash of capital to inject into the banking system. That will prevent what everyone fears: a run on European banks.

Otherwise, we're looking at more Dexias.

Also on the show, the department store Kohl's is hiring 40,000 seasonal workers for the holidays. That's up five percent from last year. Macy's, JC Penney and Meijer are also planning to hire more temporary workers than they did last year. The news that some retailers are bullish on holiday shopping is making the Marketplace Daily Pulse beat a bit more strongly today.

Follow David Brancaccio at @DavidBrancaccio