Express
German Banks Cheated the ECB out of Higher Security Score
Summary: German banks swindled higher safety score from the European Central Bank (ECB) by increasing share of securities before the 2014 asset quality review (AQR), according to a supervisory report conducted by experts from the Deutsche Bundesbank, Imperial College London, and US Federal Deposit Insurance Corporation, published on May 12.
German banks swindled higher safety score from the European Central Bank (ECB) by increasing share of securities before the 2014 asset quality review (AQR), according to a supervisory report conducted by experts from the Deutsche Bundesbank, Imperial College London, and US Federal Deposit Insurance Corporation, published on May 12.
As the report concluded, “We find that, after the ECB’s announcement of the AQR, reviewed banks increase their share of securities that have top-tier rating and reduce their share of supply of credit to riskier firms. In the period after the AQR compliance though, we find that reviewed banks fully reload back on riskier securities; however, this is not the case for riskier credit.”
By Yiran Dai
Tags: Bank,European Central Bank,risk
Link: German Banks Cheated the ECB out of Higher Security Score [Copy]
