Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/103435
Authors: 
Steffen, Sascha
Year of Publication: 
2014
Series/Report no.: 
White Paper Series 23
Abstract: 
As we are moving toward a eurozone banking union, the European Central Bank (ECB) is going to take over the regulatory oversight of 128 banks in November 2014. To that end, the ECB conducted a comprehensive assessment of these banks, which included an asset quality review (AQR) and a stress test. The fundamental question is how accurately will the financial condition of these banks have been assessed by the ECB when it commences its regulatory oversight? And, can the comprehensive assessment lead to a full repair of banks' balance sheets so that the ECB takes over financially sound banks and is the necessary regulation in place to facilitate this? Overall, the evidence presented in this paper based on the design of the comprehensive assessment as well as own stress test exercises suggest that the ECB's assessment might not comprehensively deal with the problems in the financial sector and risks may remain that will pose substantial threats to financial stability in the eurozone.
Subjects: 
Stress Test
Comprehensive Assessment
Asset Quality Review
European Central Bank
European Banking Authority
Single Supervisory Mechanism
Persistent Identifier of the first edition: 
Document Type: 
Working Paper

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