2023-07-23 13:10:02
In recent months, several financial scandals have erupted. Banks have gone bankrupt, endangering the global financial system. In order to avoid any risk of this system collapsing in Europe, the European Central Bank has decided to introduce new surveillance measures.
In fact, the ECB announced on 22 July its intention to monitor the state of the liquidity of banks in the euro zone more frequently. This measure, taken upstream, aims to reduce the risk of financial crises in the future.
It was the chairman of the Prudential Supervisory Board, the European banking supervisory body, an integral part of the ECB, Andrea Enria, who made this announcement in an interview with the Italian business daily Milano Finanza. An interview also published on the ECB website.
“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. He explains that “the idea is to send, more frequently, the information on the liquidity that the banks already send us monthly”.
The ECB imposes new rules
European banks will therefore have to report data that includes details, such as the maturity of the cash in the banks’ accounts, their counterparties and the refinancing operations carried out with the ECB.
A measure that underlines the distrust that has reached the financial markets following several scandals and bank failures in Europe and the United States. The communication of bank data should in particular make it possible to better control the evolution of “the most liquid assets, such as bank deposits”, indicates the chairman of the Prudential Supervisory Board. Europe is reacting in this way, in particular to the failure of Swiss credit which, last March, raised fears of financial turbulence on the old continent.
The ECB is therefore responding favorably to a recommendation made in June by the European Banking Authority (EBA), the regulator which lays down the rules for the sector. It should be noted that the European Union adopted, at the end of June, new stricter rules imposed on banks, in order to avoid a repetition of the financial crisis of 2008. These relate in particular to the calculation of the risks present in the balance sheets of banks, minimum capital requirements.
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