Linklaters’ partners – Ed Chan (London), Andreas Steck (Frankfurt), Stefaan Loosveld (Brussels) and Dario Longo (Milan) – discuss how the ECB’s new powers will work in practice and consider both the short- and long-term implications for financial institutions, regulators, investors and the wider market.

The European banking landscape is set to be re-shaped with the European Central Bank (ECB) assuming direct supervision of ‘significant’ Eurozone banks as part of the Single Supervisory Mechanism (SSM). 

The results of the ECB’s comprehensive assessment of those banks – comprising an asset quality review (AQR) and stress test – aim to increase transparency, make repairs if needed and build confidence. Ongoing balance sheet strengthening will be a key feature of the new landscape.

As the framework of a new European Banking Union comes alive and the ECB takes on the mantle of Eurozone bank supervisor, it is essential for Eurozone banks to appreciate the implications for their business of these far-reaching developments in order to navigate the new European banking landscape sure-footedly. Equally investors need to understand the new framework in order to make the most of the opportunities that this new landscape is expected to provide.

Restoring confidence: The changing European banking landscape  examines the implications of these latest regulatory developments and the new financial environment emerging as a result.

Infographic

Our infographic reviews how the significant Eurozone banks responded to the previous stress test led by the European Banking Authority (EBA) in 2011 and how they have increased their capital levels in preparation for the latest stress test.

Click on the below image to download the infographic.