According to recent reports, the European Central Bank is initiating a strategy to bolster the Eurozone’s banking system as the currency bloc’s tentative economic recovery continues.
This morning the financial institution announced that a 12-month review of the largest 130 banks in Europe will kick off in November, with the intention of uncovering bank losses.
This will then be followed by a stress test, pushing banks into taking defensive action to repair their finances.
Of the new plan ECB President Mario Draghi sated; ‘A single comprehensive assessment, uniformly applied to all significant banks, accounting for about 85 per cent of the Euro area banking system, is an important step forward for Europe and for the future of the Eurozone economy. Transparency will be its primary objective. We expect that this assessment will strengthen private sector confidence in the soundness of Euro area banks and in the quality of their balance sheets.’
The Euro is currently trading against the Pound in the region of: 0.8524
As the ECB has had to battle major banking crises in Spain and Ireland, both of which could have been averted if stress tests had been more thorough, it intends for this review to be tough and comprehensive.
According to Unicredit economist Marco Valli; ‘A poorly managed exercise would undermine the ECB’s credibility as supervisor from day one, with potentially adverse consequences also for its credibility in the field of monetary policy.’
Ahead of the release of minutes from the latest Bank of England policy meeting and the publication of a consumer confidence index for the Eurozone the Euro was trading close to a seven-week high against the Pound.
Against the US Dollar the Euro largely retained gains after yesterday’s disappointing US non-farm payrolls report led to ‘Greenback’ declines.
Economists have forecast that today’s consumer confidence report for the Eurozone will show modest improvement, with a gauge of sentiment rising from 14.9 to 14.5.
Euro (EUR) Exchange Rates
As of 09:00
The Euro/US Dollar Exchange Rate is currently in the region of: 1.3768 <
The Euro/Pound Sterling Exchange Rate is currently in the region of: 0.8524 >
The Euro/Australian Dollar Exchange Rate is currently in the region of: 1.4269 >
The Euro/ New Zealand Dollar Exchange Rate is currently in the region of: 1.6387 >
The Euro/ Canadian Dollar Exchange Rate is currently in the region of: 1.4216 >