The European Central Bank announced on Saturday that it wanted to monitor the liquidity situation of banks in the euro zone more frequently to reduce the risk of future financial crises.
“We have decided to ask the banks, starting in September, to send us information weekly, in order to have more recent data and better monitor the evolution of liquidity,” said Andrea Enria, president of the Supervisory Board, the European banking supervisor part of the ECB.
Credit Suisse default
These data include details such as the maturity of cash held in the accounts of banks, their counterparties and refinancing operations carried out with the ECB. This should make it possible, in particular, to better control the evolution of “the most liquid assets, such as” bank deposits “, added the supervisor.
This initiative comes at a time when the bankruptcy of regional banks in the United States in March, followed by the bankruptcy of Credit Suisse, raised fears of new financial turmoil. It responds to a recommendation made in June by the European Banking Authority, the EBA, the regulator that sets the rules for the sector.
At the same time, the European Union adopted at the end of June new stricter rules imposed on banks to prevent a repeat of the 2008 financial crisis (calculation of risks present in banks’ balance sheets, minimum capital requirements).
In this context, Andrea Enria advocated further cross-border consolidation of the European banking sector. “A more integrated market” of European banks “would be advantageous because it would better deal with possible shocks,” he said.
Source: BFM TV
