Saw this on DJN and the first thing that came to mind was "really?". Now, forgetting for the moment the farce that was the first European stress test (we'll recall it was like a spa day), how could publishing results of the stress test be problematic? The only reason I can think of is if the system has not improved as much as thought and there is a fear of "renewed" focus (ie. sell off).
European Central Bank governing council member Ewald Nowotny said Thursday he is sceptical about plans to publish detailed results of European bank stress tests, but acknowledges that there seems to be a political majority in favor of doing so.
The bank stress tests are viewed as an important tool to evaluate the stability of the financial sector and individual institutions in likely crisis scenarios.
The U.S. has chosen to publish specific details about the health of their banks, and the question has arisen as to whether Europe should follow suit.
The issue was discussed at the inaugural meeting of the new European financial sector watchdog, the European Systemic Risk Board, which has the ECB governing council members on its board.
"We have had a discussion on whether to publish detailed results, and I think there's a political majority that wants to do it in the same manner as the U.S., " Nowotny said.
However, he added: "I consider it [to be] very problematic to publish the stress tests."
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