We want this exercise to be rigorous to restore confidence in the European banking sector after two previous stress tests failed to do so. This means that it may reveal capital shortfalls. It is therefore essential for market confidence that supervisors and governments make clear  2  BIS central bankers’ speeches  ex ante how such shortfalls would be dealt with.
Let me list five such points which I think capture the essential elements of Board's engagement with management and fulcrum of its responsibilities: i. Boards should ensure that management is transparent about the banks' financial performance / statements and risk management practices so that trust with stakeholders is built and investors are able to assess the various risks associated with banks. ii.