FRANKFURT (MNI) – The upcoming bank stress tests in Europe include
a more demanding set of scenarios than the previous round, European
Central Bank Governing Council member Yves Mersch said Monday.
Presenting the latest Bulletin of the Luxembourg Central Bank,
which he heads, Mersch affirmed that “the macroeconomic conditions —
the gap between the actual projected economic outturn and the one that
is foreseen in the scenario [of the stress tests] — is larger than the
gap was during the last scenario.”
“Some said, ‘Well, you don’t foresee deflation,’ but we are way out
of deflation right now and we were much closer to it during the last
scenario,” he continued. “So from that point of view, the severity is
larger…Other elements are also more severe than in the previous stress
tests. I would say it would be a wrong assessment to say that they are
more lenient than the last stress tests.”
Mersch noted that “there is a recommendation” according to which
the banks that are tested in any given country “should represent 50% of
the overall” national banking sector. But within that guideline, “each
country is nevertheless free to include in the stress tests banks that
they deem” should be included.
Asked whether there was a danger that authorities would be so
selective in choosing which banks to include that they would impair the
credibility of the results, Mersch simply said he did not know what
banks other countries besides Luxembourg would choose to include.
“The final map of the stress tests is not yet fully on the table,”
he added. “There are still ongoing discussions.”
“So I think basically what I want to say is that the European
stress test is not more lenient than the national,” he continued.
“Because I heard one supervisor claiming that, which is not correct.”
It is necessary to “see the overall picture” of the upcoming
European stress tests, Mersch emphasized. “This is about solvency, not
liquidity.”
–Frankfurt bureau tel.: +49-69-720142. Email: dbarwick@marketnews.com
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