The EU-wide bank stress-testing exercise was comprehensive and rigorous, and the results confirm the resilience of EU and euro area banking systems as a whole to severe economic and financial shocks, the European Central Bank reaffirmed in its latest monthly bulletin.
It noted that the stress test,prepared and conducted by the Committee of European Banking Supervisors and national supervisory authorities, in close cooperation with the ECB, has also significantly enhanced transparency regarding the current financial conditions and risk exposures of the 91 institutions that participated in the exercise. Hence, the exercise represents an important step forward in restoring market confidence.
The ECB repeated that its current key interest rates remain appropriate. The Governing Council continues to expect price developments to remain moderate over the policy-relevant medium-term horizon, benefiting from low domestic price pressures.
The central bank said available economic data and survey-based indicators suggest a strengthening in economic activity in the second quarter of 2010, and the available data for the third quarter are better than expected.
The Governing Council continues to expect the euro area economy to grow at a moderate and still uneven pace, in an environment of uncertainty. The rate-setting body also expects price stability to be maintained over the medium term, thereby supporting the purchasing power of euro area households.
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