On Wednesday 24 October, the European Central Bank started a comprehensive assessment in advance of its supervisory role in order to submit the Eurozone’s top banks to risk assessment, asset quality review and stress test next year, starting in November. With this exercise it aims to improve transparency, repair trust and build confidence. The ECB highlighted that this is expected to be “an important step in the preparation of the single supervisory mechanism and, more generally, towards greater transparency of the banks’ balance sheets and consistency of supervisory practices in Europe”. Mario Draghi, the ECB President, believes this kind of assessment, uniformly applied to all significant banks, will be an important step forward for Europe and for the future of the euro area economy. He also expects it will strengthen private sector confidence in the soundness of euro area banks.
EuroFinUse has already stressed that insufficient resources were allocated to EU supervisory authorities, which resulted in disappointed results of the European System of Financial Supervision. The European Supervisory Authorities (ESAs), set up to avoid repeating the bank crises of 2008-2009, have failed in sanctioning banks. This is the wrong approach to restore investors’ confidence in European equity markets and in European banks. EuroFinUse expresses its concerns with the ECB plan and calls for a close monitoring of European supervisory authorities.
Please read ECB press release here and EuroFinUse's position paper on the review of the European System of Financial Supervision here.