Guillaume Prache, Managing Director at BETTER FINANCE, was interviewed by the French daily newspaper "La Liberté" on the stress tests the European Central Bank (ECB) is carrying out in 123 banks across the 28 European Union countries.
The ECB is scrutinizing 130 banks in the 18 eurozone countries and Lithuania, which is set to join the currency union on January 1. National regulators have helped it carry out the tests.
Mr. Prache showed his concerns in light of the catastrophe 2011's stress tests proved to be for depositors and small investors with no access to privileged information in several European banks.
The solution lies in structural bank reforms: for Guillaume Prache, the extreme complexity of banks' activities, which expanded from traditional lending and deposit to market activities, makes the analysis of balance sheets much more intricate. This is why conventional activities of commercial banks (such as collection of deposits, lending to the economy real) should be clearly separated from others.
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