Europe bank stress tests may be too tough- ECB's Nowotny

Monday 16 June 2014 17.56
ECB Governing Council member Ewald Nowotny fears stress tests will be too tough
ECB Governing Council member Ewald Nowotny fears stress tests will be too tough

Stress tests being conducted on major European banks before the European Central Bank takes on supervising them late this year may end up being too tough, ECB Governing Council member Ewald Nowotny has said.

"The test will be strict, perhaps even too strict. I fear that in the ambition to do this especially well the ECB will go far beyond what the US has done," he told a German newspaper.

"That can lead to exaggerations," he added.

Nowotny, also governor of the Austrian central bank, said he saw no problems or "shaky candidates" among the six Austrian banks to come under direct ECB supervision late this year.

Nowotny again dismissed speculation the ECB could resort to direct purchases of state debt to help boost the euro zone economy. 

"The ECB will not be led by the dictates of the market. It makes no sense to conduct phantom discussions of any kind," he said.

He also defended the ECB's decision to cut interest rates to record lows and said the impact on savers was being overestimated.

Keywords: ecb, stress tests