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"Nominally, stress tests were supposed to demonstrate European banks are stable. Instead, they have mercilessly revealed the impotence of the European banking authority," says the Frankfurter Rundschau. The need to strengthen the authority was nevertheless the first lesson that politicians and bankers drew from the 2008 crisis.
But the evidence is there to say this has not happened: with 25 employees and very few human eyes, the Committee of European Banking Supervisors (CEBS), the European banking authority, was "simply overwhelmed by the Herculean burden" of evaluating 91 banks. Worse, as the center-left daily argues, national banking authorities have given up. The German Financial Services Authority has sent a note to the 14 institutions involved, calling their leaders to estimate the share of equity capital they need to pass the test and obtain a lull in the markets.
"It's like asking the bandits how to make policing better," protested the FR, citing experts saying that it would be better to abandon the ambition to strengthen the powers of the CEBS and instruct national authorities, closest to the banks of the evaluation of the latter.
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