Europe's Banking Regulator: Too Many Banks Survived The Financial Crisis

Andrea EnriaBrendan Smialowski/AFPEuropean Banking Authority (EBA) chief Andrea Enria, shown September 25, 2011 in Washington, DC, says too many European banks survived the financial crisis.

Too many European banks survived the financial crisis, the head of Europe’s banking regulator said in a newspaper interview on Monday.

“I’m convinced that too few European banks were dismantled and disappeared from the market,” European Banking Authority (EBA) chief Andrea Enria told the daily Frankfurter Allgemeine Zeitung in an interview.

“Barely 40 (disappeared), compared with around 500 in the United States,” he said.

“Governments wanted to keep their banks alive and that has hampered the healing process” of Europe’s financial system, Enria said.

The EBA organised a series of stress tests for European banks in recent years which have been criticised as being too lenient.

Europe is currently in the process of setting up a new banking union to strengthen its financial system. And Enria is favour of putting in place truly Europe-wide structures, he told the Financial Times.

“You need European decision mechanisms rather than having always a committee-type of decision in a crisis,” he said.

“Committees in a crisis don’t work because you have conflicts.”

And he added: “They give us responsibilities but they put so many national safeguards on every task we need to do that sometimes I am concerned we will not be able to perform [them].”

Copyright (2013) AFP. All rights reserved.

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