Brian Hayes MEP today (Wednesday) said that the European Banking Authority’s decision not to run stress tests on banks is a big risk to the financial stability of the European banking system.
“The EBA’s decision not to run stress tests in 2015 is simply not good enough if we consider how the European economy has suffered over the last number of years due to bad banking practice. The EU should be following the US Fed’s example of conducting annual stress tests on the systemically important banks,” said Mr. Hayes
“The EBA is required under EU Regulations to consider undertaking stress tests annually but instead has opted to conduct a transparency exercise with banks. A transparency exercise will not suffice. As we have seen throughout the crisis it takes rigorous efforts to precisely determine the health of certain banks, especially the big players.
“Progress has been made and our banks are in a much healthier position but if we want to ensure stability into the future I think that stress test frequency should be done on an annual basis.”