Banks are more secure, for the benefit of the economy: the European Commission has welcomed the publication of the results of the test, the pressure at the level of the EU, conducted by the European Banking Authority and the comprehensive assessment by the European Central Bank
At the onset of the financial crisis, the resilience of european banks has been significantly enhanced by significant improvements in the legal framework of the EU, the level and quality of supervision, and the capital of the banks. The results of today (b.no. 26.10.2014) of the test, the stress, on the level of the EU and the comprehensive assessment, which is the most intense of which have been the subject again, the banks in Europe, confirms that on the whole this is a positive trend. This is also an important step towards an effective Single Supervisory Mechanism is functional, and is a key component of the Banking Union.
Yet there is no room for complacency
All these exercises are solid, on an unprecedented scale, and are among the most stringent in the world, ensures a high level of transparency with regard to the balance sheet and the exposure of data to the banks of the EU at the end of the year in 2013, and allow you to identify and address any potential vulnerabilities that remain. They are an integral part of the efforts of policy-makers to build up its banking sector, european, solid and stable, paving the way for appropriate corrective action, which they will have to take into account the additional capital that may be of high quality, drawn by the bank in January 2014.
There, where the identified deficiencies of the net equity, that the relevant competent authorities, including the ECB, as the sole authority for the supervision of the Banking Union, will be in charge of, as of the date of the 4th of November, in the identification and implementation of all the measures for the surveillance, as required. Take action fast and thorough, and the results of your workout, you'll be a step of critical importance.
The commission will insist upon successful completion of this process, in order to fully restore confidence in european banks, so that they can once again provide affordable credit to the real economy, to households and SMES in particular.
During this process, the Commission shall ensure that such follow-up actions shall be in accordance with the legislation of the EU. Our priority will be to ensure that the potential capital shortfalls will be covered by private sources. If, however, there is a need for the support of the state, the Commission shall apply the provisions of the EU state aid rules, in particular the Communication from the Commission on banking sector in November 2013, thereby ensuring a level playing field in the single market, and is limited to the minimum necessary, the assistance of the public.
Today's results and follow-up of the test, the stress, on the level of the EU and the comprehensive assessment provides assurance to investors about the quality of the balance sheets of european banks. This will be followed by a continuous vigilance and rigorous action on the part of all authorities with supervisory authorities, with the support of the European Commission. The ECB, in its capacity as the single supervisor of the Banking Union, you will play a key role in this process.
Background:
One of the main weaknesses of the european banking industry, highlighted by a crisis, it was not significant under-capitalisation of the bank. The strengthening of the resilience of the european banking sector and the protection of the taxpayers ' money, has been one of the main priorities of the Commission in the past five years.
It has made considerable progress. It has been implemented a new regulatory framework in the European Union, of which it is worth mentioning in particular:
- the new prudential rules for banks, set out in the Regulation and the capital requirements Directive, implemented in the legislation of the EU with a comprehensive set of reform measures developed by the Basel Committee on Banking Supervision, requiring banks to hold a sufficient amount of equity, and liquid assets of high-quality framework (Basel III).
- the new resolution framework set out in the council Directive on bank recovery and resolution, which will take effect next year and will be put at the disposal of the authorities in charge of the tools are important in order to intervene quickly enough, and to facilitate the resolution process, the main objective is the protection of the taxpayer; and
- the creation of the single supervisory Mechanism and the single resolution Mechanism, which will greatly improve the quality of the supervision and resolution in the context of the member states of the european Union's Bank.
These regulatory changes, coupled with other factors, as well as the supervision and pressure of the market, have led to significant improvements in the resilience of the european banking industry in the last few years, especially in terms of the attraction of additional capital, the better. In the period from 2008 to 2013, with the banks taking part in the evaluation of the complex were drawn up capital in excess of 200 billion euros. In the month of January 2014, there have been raised a further 57 billion, an amount that is not taken into account in the calculation of the results, but it will be kept, in order to reduce the deficits were observed. As of December 2011 and December 2013, the common equity tier 1 capital of banks in the EU has increased by more than 200 basis points.[1]
In order to identify and address any remaining vulnerabilities in the banking sector, the european parliament, the European Banking Authority has directed a stress test at the level of the EU. It covers the 123 is one of the most important banking groups in the European Union. In the member states of the Banking Union, the control of the supervisors were very large, and also includes the Analysis of the Quality of the Assets, with the aim of providing a starting point for a solid and consistent for a stress test. The ECB has reviewed the 130 banks headquartered in the euro area. The aim of this comprehensive assessment is that the ECB, in its capacity as new single supervisor to make sure that you have a complete view of the banks that are under the direct supervision from the 4th of July.
If capital shortfalls are identified, the Board has made clear, on November 15th, 2013 in order for the implementation of the protection measures. First of all, the banks would need to raise capital from markets or from other private sources. Only in the case that this stock is not enough, the funding of the public can be engaged at the national level, and in compliance with the EU rules on state aid. In the event that the measures for the protection of national't enough, I have used tools at the european level, the European Stability Mechanism for the euro area.
The European Commission has temporarily adapted itself, through a Communication ("Communication from the Commission on the application, from 1 August 2013, of the rules on state aid in the case of support measures in favor of banks in the context of the financial crisis", known as the "Communication on the banking sector" from 2013), the rules on state aid, to establish the public support granted to financial institutions during the crisis. The main changes, applicable from 1 August 2013, include the need for banks to develop a solid plan for restructuring or orderly liquidation before they can benefit from recapitalization or protection measures. They also include consolidated burden-sharing: in the event of a capital shortfall, bank shareholders and subordinated creditors are now required to contribute, in the first instance, before banks can request public funding.
[1] the Definition of a point is the main (system): the basic Point is 1 / 100th of a percent, which translates to about 0.01%.
