Sunday

2nd Apr 2023

ECB withheld information on 'flawed' bank supervision

  • The ECB has established a substantial framework for crisis management procedures but it has 'flaws' (Photo: ECB/Flickr)

The European Central Bank (ECB) refused to provide "important evidence" when the EU Court of Auditors examined its management of banking crisis.

This "had a negative impact on the audit work...on the operational efficiency of the ECB's crisis management for banks" the guardian of the EU finances said in a report published on Tuesday (16 January).

Read and decide

Join EUobserver today

Become an expert on Europe

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

... or subscribe as a group

"It is not satisfactory for us," Kevin Cardiff, a member of the court who supervised the report, told journalists in Brussels.

He said that although the ECB was a "very independent institution which has multiple layers of accountability," the scrutiny by the European Parliament and the member states "is enhanced if there is a good, proper, sound, solid audit to provide information to them."

"We see our role as supporting democratic scrutiny," he said, while admitting that under the EU treaty, the auditors cannot examine the ECB's policy-based decision-making.

In their report, the auditors said that the ECB, as a supervisory body for EU banks, "has established a substantial framework for crisis management procedures" but that it was flawed.

They noted that the ECB's process for the assessment of banks' recovery plans was "positive" and that "submission and monitoring procedures are in place," with assessors having access to useful tools.

However, they found "flaws" in the crisis management and recommended better communication and coordination by the ECB with other actors, such as the Single Resolution Board, the EU agency that is in charge of failing banks.



In particular, the auditors said the ECB should provide additional guidance for recovery plans as well as for "failing or likely to fail assessments".

"It's important to see indications of problems at an earlier stage, and engage with them at that point," Cardiff noted.

"We felt there were some difficulties that could impend efficiency, which could be important in a crisis," he said.

But overall, he insisted, the auditors are "not saying there is a major failure in the institution."

The report follows another report on the SRB last month, in which the Court of Auditors said that it was "very much a work in progress" with "still a long way to go."

Investigation

The ECB: EU's 'bad bank' (for its employees)

An internal report finds 'lack of staff' and high 'burnout' levels at the European Central Bank in Frankfurt - the bank trusted with keeping the eurozone stable and secure.

ECB slows down eurozone support scheme

Starting in January, the European Central Bank will reduce its emergency bond-buying programme from €60 billion to €30 billion a month.

Varoufakis back in push for ECB transparency

The former Greek finance minister Yanis Varoufakis and German left-wing MEP Fabio De Masi want to know whether the European Central Bank overstepped its powers when putting capital controls on Greek banks in 2015.

Opinion

Biden's 'democracy summit' poses questions for EU identity

From the perspective of international relations, the EU is a rare bird indeed. Theoretically speaking it cannot even exist. The charter of the United Nations, which underlies the current system of global governance, distinguishes between states and organisations of states.

Opinion

Turkey's election — the Erdoğan vs Kılıçdaroğlu showdown

Turkey goes to the polls in May for both a new parliament and new president, after incumbent Recep Tayyip Erdoğan decided against a post-earthquake postponement. The parliamentary outcome is easy to predict — the presidential one less so.

Latest News

  1. EU to press South Korea on arming Ukraine
  2. Aid agencies clam up in Congo sex-for-work scandal
  3. Ukraine — what's been destroyed so far, and who pays?
  4. EU sending anti-coup mission to Moldova in May
  5. Firms will have to reveal and close gender pay-gap
  6. Why do 83% of Albanians want to leave Albania?
  7. Police violence in rural French water demos sparks protests
  8. Work insecurity: the high cost of ultra-fast grocery deliveries

Stakeholders' Highlights

  1. EFBWWEFBWW calls for the EC to stop exploitation in subcontracting chains
  2. InformaConnecting Expert Industry-Leaders, Top Suppliers, and Inquiring Buyers all in one space - visit Battery Show Europe.
  3. EFBWWEFBWW and FIEC do not agree to any exemptions to mandatory prior notifications in construction
  4. Nordic Council of MinistersNordic and Baltic ways to prevent gender-based violence
  5. Nordic Council of MinistersCSW67: Economic gender equality now! Nordic ways to close the pension gap
  6. Nordic Council of MinistersCSW67: Pushing back the push-back - Nordic solutions to online gender-based violence

Join EUobserver

Support quality EU news

Join us