ECB banking watchdog on track for goals

//ECB banking watchdog on track for goals

ECB banking watchdog on track for goals

Monday 23 June 2014 12.11

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Daniéle Nouy, chair of the Supervisory Board of the ECB, in Dublin today at the IBF conference Daniéle Nouy, chair of the Supervisory Board of the ECB, in Dublin today at the IBF conference ECB has received over 14,000 applications for 800 jobs it plans to fill by the end of the summer ECB has received over 14,000 applications for 800 jobs it plans to fill by the end of the summer

There is sufficient liquidity in the market if euro zone banks want to raise more capital as they prepare for pivotal stress tests later this year, the euro zone’s top regulator said. 

The ECB’s Single Supervisory Mechanism is preparing to run the rule over 128 banks it will begin supervising from November in stress tests billed as the toughest yet after previous exercises failed to convince markets. 

Banks have taken action on capital ahead of the tests and strengthened their balance sheets by €104 billion in the nine months to April through, for example, capital hikes or increased provisions, the ECB said at the time. 

“The markets are in a reasonably benign situation and there is liquidity ready to be invested in banks, in equity or funding, if the markets are convinced by the transparency exercise that we are undertaking,” Daniéle Nouy, chair of the Supervisory Board of the ECB, said when asked if the ECB expected banks to carry out more capital raising. 

She made her comments at the Irish Banking Federation’s conference entitled “The New Regulatory and Supervisory Roadmap for Europe” in Dublin today.

The ECB’s review, aimed at encouraging banks to recognise losses on loans or investments that have gone bad so that they can regain investor trust and help the euro zone’s fragile recovery, was well on track to achieving its goals, Nouy said. 

Speaking at the Dublin conference, Nouy said the SSM had received over 14,000 applications for 800 jobs it plans to fill by the end of the summer

ECB has received over 14,000 applications for 800 jobs

Speaking at a conference in Dublin attended by chief executives and senior officials from the country’s main banks, Nouy said the SSM had received over 14,000 applications for 800 jobs it plans to fill by the end of the summer. 

The ECB had said at the end of May that it had received 8,000 applications for SSM jobs, which have a top salary of €245,000 a year and enjoy the low tax rates of those working for a supranational authority. 

Nouy, formerly a French regulator, said the ECB would publish a guide to the supervisory practices and methodology of the SSM before it takes on the role of supervisor, to ensure transparency. 

She added that national supervisors would play a “major role” in this year’s assessment and that the ECB would largely rely on them to provide the risk assessment and Supervisory Review and Evaluation Process (SREP) elements as its own systems need further field-testing. 

One of those regulators, the Central Bank’s deputy governor Cyril Roux, said he expected a first submission of an interrogation of loan books as part of the SSM’s asset quality review to be made at the end of the month. 

Roux, the head of regulation at the Central Bank, also said that the Bank would review its supervisory model for smaller banks, many of whom are based in the Irish Financial Services Centre.

Ireland’s local banks, a rescue of which which cost the state the equivalent of 40% of annual output, will be subject to the ECB’s tests. 

Nouy said that while work was still needed, particularly on troubled mortgages, the restructured Irish banking sector was moving in the right direction.

“What had to be done has been done or is being done and the Irish banks at the end of these reforms will be able to finance the economy,” she said.

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By | 2014-06-23T12:10:10+00:00 June 23rd, 2014|Business|0 Comments