The European Central Bank (ECB) announced on Saturday July 22 that it wanted to monitor euro zone banks more frequently to reduce the risk of financial crises. “We have decided to ask the banks, from September, to send us information on a weekly basis, in order to have more recent data and to better monitor liquidity developments”said Andrea Enria, chairman of the Supervisory Board, the European banking supervisor, which is an integral part of the ECB. This liquidity information is now transmitted weekly, he said in an interview. with the Italian business daily Milano Finance.
This data includes details such as the maturity of cash held in banks’ accounts, 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 deposits” banks, added the supervisor.
Risk calculation
This initiative is taken after the bankruptcy of regional banks in the United States in March and then the failure of Credit Suisse raised fears of new financial turbulence. It responds to a recommendation made in June by the European Banking Authority, the regulator which sets the rules for the sector. At the same time, at the end of June, the European Union imposed new stricter rules on banks in order to avoid a repeat of the 2008 financial crisis, in particular through the calculation of the risks present in the balance sheets and the minimum capital requirements.
In this context, Andrea Enria called for greater cross-border consolidation of the European banking sector, on the grounds that“a more integrated market would be advantageous because it would make it possible to better deal with possible shocks”.