17 Jul 2014
ECB's Constancio: Strictness of stress tests not only about results
FXStreet (Łódź) - Vice-President of the ECB Vítor Constâncio commented on the details of Eurozone bank stress tests, released by the central bank on Thursday, saying that their strictness was not only about the results, as they have already prompted many lenders to raise new capital.
“Banks know what we expect and have advance notice to prepare for the outcome of the comprehensive assessment,” the ECB policymaker said in a statement. “Much work has already been undertaken to repair banks’ balance sheets and, encouragingly, this work is continuing.”
Constâncio admitted that some of the financial institutions would fail the stress tests but that there shouldn't be too many of them. He also added that the current strength of the euro reflected the improvement in market sentiment.
"The upcoming stress tests have the potential to create some large volatility," Ryan Littlestone speculates on ForexLive. "Bad news and the euro plummets, good news and it rockets."
“Banks know what we expect and have advance notice to prepare for the outcome of the comprehensive assessment,” the ECB policymaker said in a statement. “Much work has already been undertaken to repair banks’ balance sheets and, encouragingly, this work is continuing.”
Constâncio admitted that some of the financial institutions would fail the stress tests but that there shouldn't be too many of them. He also added that the current strength of the euro reflected the improvement in market sentiment.
"The upcoming stress tests have the potential to create some large volatility," Ryan Littlestone speculates on ForexLive. "Bad news and the euro plummets, good news and it rockets."