July 23, 2011

EUROPEAN CENTRAL BANK NEEDS TO BE STRESS TESTED TOO


The European Banking Authority stress tests are already barely credible given their previous track record on Irish Banks. This latest report will do little to re-enforce that credibility given that they said only 8 banks had failed out of a possible 90 and only 16 were in the danger zone. Given the depth of the Eurozone crisis these figures appear suspiciously optimistic.
There is however a glaring omission in the shape of the European Central Bank. There is no reason not to include it. It is after all the largest holder of capital assets provided by member states and all member states have an interest in the liabilities held by the bank.
In the interests of transparency and greater credibility the European Central Bank should be stress tested.

http://www.martaandreasen.com/?p=896

No comments: