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A key aim of the asset quality review and stress test of the 130 largest banks in the euro area was, according to Vítor Constâncio, vice-president of the ECB, to “boost public confidence in the banking sector”. Constâncio added: “By identifying problems and risks, it will help repair balance sheets and make the banks more resilient and robust. This should facilitate more lending in Europe, which will help economic growth.”
Though the exercise serves to remind investors just how far Europe’s banks have already gone in building big capital buffers, whether it will actually achieve any of Constâncio’s aims remains in doubt.
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