ECB bank assessment may expose capital gaps - Mersch
FRANKFURT, Sept 26
FRANKFURT, Sept 26 (Reuters) - The European Central Bank's upcoming assessment of the euro zone's top banks might expose that some have funding holes, one of the ECB's top policymakers on the project, Yves Mersch, said on Thursday.
The ECB will directly supervise 130 top euro zone lenders like Deutsche Bank, Societe Generale and Santander from November next year and is set to conduct an Asset Quality Review (AQR) to make sure they are adequately capitalised before taking up the reins.
"Some banks might face capital gaps to close," Mersch, the ECB board member in charge of setting up the Single Supervisory Mechanism (SSM), said. "In our view, it is very important for the credibility of the exercise that the scope of the process remains ambitious."
Past European Union health checks of banks have been criticised for failing thoroughly to assess holdings of sovereign debt. Some of the bonds came under huge stress at the height of the euro zone debt crisis.
Mersch added that national authorites should not be given "vetoes" when decisions need to be made on shutting or repairing a troubled bank.
He also called for a body in charge of resolution to be in place in time for when, or shortly after, the new rules come into force.
"The new provisions on bail-in would only be applicable from January 2018. This means that there will be a period of three years where the resolution authority is unable to use one of its key resolution tools."
"In my view we should push for a start date of 2015 for bail-in so that we have the full resolution toolbox available from the outset."
For full speech please click here (Reporting by Eva Kuehnen; writing by Marc Jones in London)
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