Friday

29th Mar 2024

ECB watchdog to open first investigations

  • Daniele Nouy - Greek banks can 'withstand' current turmoil (Photo: Hannelore Foerster)

The European Central Bank’s (ECB) new watchdog body is launching its first investigations into the actions of the EU’s largest lenders.

Presenting the first annual report of the ECB’s Single Supervisory Mechanism (SSM) on Tuesday (31 March), chairwoman Daniele Nouy said it would open investigations into three “significant” banks for breaching EU law.

Read and decide

Join EUobserver today

Get the EU news that really matters

Instant access to all articles — and 20 years of archives. 14-day free trial.

... or subscribe as a group

A total of 11 alleged breaches were reported to the SSM in the past four months, with three “appropriate for follow-up”, according to the report published Tuesday.

Nouy added that the watchdog would be “keeping an eye on aggressive 'search-for-yield' strategies with a view to identifying lax credit standards”.

She warned the ECB is also monitoring the banks of crisis-hit countries as they are "more prone to corporate defaults".

She added: "We will be a tough supervisor but ... will strive to be fair".

The SSM was created at the start of 2014 but formally assumed its new role as the chief supervisor of EU banks last November, in what was considered to be a milestone in the creation of the bloc's "Banking Union".

It supervises the eurozone’s 130 largest financial institutions.

Like the EU competition authorities, it has the power to fine banks up to 10 percent of annual turnover. Crucially, it can demand lenders put away more capital to protect themselves against losses in the event of a banking crisis.

Twenty five EU-based lenders failed the ECB’s audit of its 130 largest banks last autumn aimed at assessing whether banks would have the capital to withstand future crises.

The banks which failed were said to have combined capital shortfalls of €24.6 billion.

Meanwhile, speaking at a European Parliament hearing on Tuesday, Nouy played down the extent of the cashflow crisis facing Greek banks, describing the country’s lenders as being in “a much better solvency situation than in previous years".

“In my view they have never been so well equipped to go through this political episode,” she said.

ECB takes control as EU bank supervisor

The ECB formally assumes its new role as the chief supervisor of EU banks on Tuesday, in a milestone for the creation of the bloc's banking union.

'Swiftly dial back' interest rates, ECB told

Italian central banker Piero Cipollone in his first monetary policy speech since joining the ECB's board in November, said that the bank should be ready to "swiftly dial back our restrictive monetary policy stance."

Opinion

EU Modernisation Fund: an open door for fossil gas in Romania

Among the largest sources of financing for energy transition of central and eastern European countries, the €60bn Modernisation Fund remains far from the public eye. And perhaps that's one reason it is often used for financing fossil gas projects.

Latest News

  1. Kenyan traders react angrily to proposed EU clothes ban
  2. Lawyer suing Frontex takes aim at 'antagonistic' judges
  3. Orban's Fidesz faces low-polling jitters ahead of EU election
  4. German bank freezes account of Jewish peace group
  5. EU Modernisation Fund: an open door for fossil gas in Romania
  6. 'Swiftly dial back' interest rates, ECB told
  7. Moscow's terror attack, security and Gaza
  8. Why UK-EU defence and security deal may be difficult

Stakeholders' Highlights

  1. Nordic Council of MinistersJoin the Nordic Food Systems Takeover at COP28
  2. Nordic Council of MinistersHow women and men are affected differently by climate policy
  3. Nordic Council of MinistersArtist Jessie Kleemann at Nordic pavilion during UN climate summit COP28
  4. Nordic Council of MinistersCOP28: Gathering Nordic and global experts to put food and health on the agenda
  5. Friedrich Naumann FoundationPoems of Liberty – Call for Submission “Human Rights in Inhume War”: 250€ honorary fee for selected poems
  6. World BankWorld Bank report: How to create a future where the rewards of technology benefit all levels of society?

Join EUobserver

EU news that matters

Join us