The ECB has hired Oliver Wyman to help out with a thorough audit of the 130 largest banks in the eurozone. The choice is set to lend credence to claims that it will be a rubber-stamping exercise that banks are lobbying for.
Oliver Wyman is a known name in the world of eurozone bailouts and bank "stress tests." Back in 2006, it famously said the Anglo Irish Bank was the best bank in the world. Three years later, the bank had to be nationalised and almost bankrupted the Irish state, which then needed a eurozone bailout. Last year in the Spanish bank bailout, Oliver Wyman provided eurozone decision-makers with the numbers they expected and which were politically acceptable - around €60 billion instead of a much larger gap that the banks actually had.
"Oliver Wyman will support the ECB’s management and coordination and will provide financial advisory services for this project, notably in refining the methodology for the assessment", the ECB said in a press release.
Speaking in the European Parliament on Monday, ECB chief Mario Draghi stressed the importance of this review to be "credible," else it would be "completely useless, if not counterproductive".
If the balance sheets prove to have too many bad loans and a high risk exposure, there is little the ECB can do - as even the eurozone bailout fund would be too small to fill the gap of big houses like Deutsche Bank or SociétéGénérale. The worry in eurozone central banks, according to one insider, is that if banks are reviewed too thoroughly and their problems exposed, they will stop lending and revive the financial crisis.
Full article
© EUobserver.com
Key
Hover over the blue highlighted
text to view the acronym meaning
Hover
over these icons for more information
Comments:
No Comments for this Article