FRANKFURT (MNI) – Publishing data from European bank stress tests
risks doing more harm than good, Bundesbank Vice President
Franz-Christoph Zeitler said in an interview published Monday.
“In particular, with the publication of the data of individual
banks, the stress tests change their character and can themselves become
a source of risks,” the central banker explained to German business
daily Handelsblatt.
“The publication of detailed liquidity data is more sensitive than
the stress test results on the earnings and capital situation. The
danger that the publication of such data intensifies or outright causes
stress cannot be dismissed,” he added.
Markets also might confuse the theoretical scenarios of stress
tests with forecasts, the banker told the paper. Moreover, publishing
the test results too often could hurt the desired effect of using the
tests to gain market confidence.
Policy makers are currently ironing out the details for the next
round of European bank stress tests. Last year, 91 banks throughout the
continent were tested and seven failed. Many experts believe that last
year’s test was not rigorous enough.
[TOPICS: M$X$$$,MGX$$$,MFX$$$,M$$CR$,M$G$$$]