Local view for "http://purl.org/linkedpolitics/eu/plenary/2011-05-10-Speech-2-714-000"
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"en.20110510.68.2-714-000"2
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"Mr President, I should like to say this to the Commissioner: the bank crisis resolution is being elaborated at an international level and there are also important competition issues to address, but this does not mean that everything has to wait, in particular when we have a combined sovereign debt and banking crisis.
Last year’s tests were weak. We said so then and have repeatedly said that bank stress tests must be credible, robust and transparent. Indeed we need a whole lot more banking transparency in general. So I suggest that we take a lesson from the US and the Dodd Frank Act which requires disclosure, with a two-year time lag, of the US Fed’s liquidity provision. There are European names in the US disclosures, and it would be an altogether healthy thing for EU central banks to follow suit with similar disclosure about support during 2008 and 2009 as an accompaniment to the new stress tests.
Now these new stress tests are improved under the EBA but there are still issues being avoided due to guarding and prevarication by Member States. It is about time that the message sank in that feeble political will is not the answer to this crisis and makes solutions more expensive. Why try and hide the full level of banks’ exposure to sovereign debt, especially when we all know the likely reality?
There really is no excuse not to stress-test the banking book. Various assets got parked there, under the heading of Hold to Maturity, which would have been moved if they had not lost value. Of course, analysts in the market are well able to read across from stress tests and other information and make an estimate as to what is going on in the banking books. But a darker interpretation, reflecting on some Member States themselves, will be cast by the fact that Member States – and in many cases the supervisors are the culprits – were not bolder incoming clean.
Meanwhile actions are being provoked by the stress tests; banks are seeking capital; some Member States are being proactive in pushing banks to raise capital. But there is no overall plan to address under-capitalisation. This simply does not stack up; surely one thing we have learned in the crisis is that we are very interconnected. If banks do not trust one another and inter-bank lending is frozen, we have a big problem. So please can we have proper disclosed coordination of the response?
But let us not dodge the elephant in the room: this is not just about banks, it is about sovereign debt and the stability of the euro: inextricably linked and overwhelmingly important."@en1
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