When Europe announced its latest health check of top banks early last year it promised a “comprehensive assessment” of how well prepared they were to withstand another financial crisis. In practice, a spirit of comprehensive compromise has been just as important.
A series of Reuters interviews with officials, bankers and others involved in the European Central Bank’s financial inspection of the euro zone’s biggest banks shows that in the seven months since it began, the ECB has had to shoot down countless pleas from banks and national supervisors for special treatment.
At the same time, according to sources who spoke on condition of anonymity, supervisors have revised the way they value assets and banks have failed to provide all the data demanded – multiple compromises that could cumulatively threaten the tests’ reputation as tough and consistent.
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