The ECB is prepared to conduct the necessary balance-sheet reviews and related assessments in cooperation with other national and EU authorities and possibly third parties. This is particularly the case for forward-looking analysis of banks’ solvency in the form of stress tests for individual banks, envisaged in the legislative proposal establishing the SSM.
The ECB, similarly to other national central banks, has over the years strengthened its analytical capacity to support its financial stability function, notably the need to carry out systemic risk assessments in real time to support policy discussions.6 Such analytical capability supporting financial stability assessment work has furthermore been essential to support country-specific analysis to support discussions on the financial sector of countries under financial assistance and in support to the EBA in conducting EU-wide macro stress tests.