ECB chief bank supervisor meets economic committee | WPN World People News

Daniele Nuoy, the head of the single supervisory mechanism at the European Central Bank (ECB), will participate in a hearing at the Parliament on the efficient supervision of European financial institutions. The ECB published stress tests of major European banks on 26 October, revealing that 24 banks failed the test and will have to raise additional capital.

The aim of the tests was to find out whether large European banks whose failure could have consequences for the stability of the euro area as a whole were able to withstand a number of adverse scenarios. Stress tests were coordinated by the European Banking Authority (EBA).

In order to stay in business, banks need to have a capital cushion big enough to withstand losses. Twenty-four banks were found lacking. They will have to boost their capital by at least €24.6 billion in total.

For years the Parliament has called for the establishment of a single supervisory mechanism charged with identifying banks at risk and thus ensuring the safety and soundness of euro area banking system. It is an essential step towards an EU banking union.

Source: European Parliament