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ECB To Launch EU-Wide Audit Of Bank's Balance Sheets

Tyler Durden's picture


France and Italy are fighting against ambitious plans by the ECB to basically 'externally audit' 140 banks across the EU representing 80% of Europe's banking assets. The implementation of the project (by the head of financial stability at the central bank) appears to have two main drivers. First, to understand which banks' balance sheets are inhibiting lending (and why); and second, to ensure there is clarification on taxpayer-funded bailouts versus shareholders and depositors taking losses first. As Zeit reports, it seems the ECB appears to be questioning the reliability of the banks own figures.

Via Zeit (via Google Translate),

The European Central Bank (ECB) is working on a strong kick to overcome the crisis. It goes to the timely information in a rehabilitation center to European banks, whose balance sheet problems inhibit lending.


With the implementation of the project was Ignazio Angeloni commissioned, head of financial stability at the central bank. The timing is already set. From the autumn of the monetary authorities will illuminate along with the national supervisory authorities, the balance sheets of major financial institutions in the euro zone. There is a total of around 140 banks, which together cover about 80 percent of the market.


The ECB teams are already formed to examine the books as required directly into the banks. Thus, at the end come out reliable figures, is the intention of the central bank also independent consultants - to be on board - Wirtschaftsprüer or investment companies.




Results are expected by early next year. If they are present, to use a stress test to examine how well the banks cope with a renewed economic slump. Financial institutions that can not even fill possible gaps capital should be recapitalized by the Member States. If they are not able to lift the renovation alone, they can access loans from the ESM bailout fund to fall back.


The risk should not alone bear the taxpayers: Even shareholders, creditors and customers of the affected banks will be first used to cover the losses.


Whether the ambitious timetable can be adhered to, is not clear. Especially France and Italy, reportedly to fight against it, to have their banks by external auditors. The ECB could see forced to look not as accurate when examining the balance sheets, because there is still no European resolution authority for banks are.

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Wed, 06/05/2013 - 09:49 | 3626052 kliguy38
kliguy38's picture


Wed, 06/05/2013 - 09:53 | 3626071 Groundhog Day
Groundhog Day's picture

Under the guise of an Audit, the ECB is actually identifying all the large depositors and setting up excel speadsheets.  When the time comes to cyprus aka corzine the savers of europe and make them into investors, they'll be able to do it cleanly and swiftly.

Corzined Europeans

Wed, 06/05/2013 - 09:54 | 3626079 Popo
Popo's picture

So a basic audit of balance sheets wasn't involved in the so-called "Stress tests"?

What exactly were they testing?

Wed, 06/05/2013 - 10:00 | 3626102 Momauguin Joe
Momauguin Joe's picture

Circle jerking...

Wed, 06/05/2013 - 10:26 | 3626170 lakecity55
lakecity55's picture

We all know this ends in war, dead people, and wealth(ier) banksters.

Long PMs and stocked Bunkerz!

Wed, 06/05/2013 - 11:00 | 3626290 Its_the_economy...
Its_the_economy_stupid's picture


Knowing who the connected depositors and shareholders and bondholders are will allow pre-bail in "notification" of connected bagholders so an early exit can be arranged.

Wed, 06/05/2013 - 10:23 | 3626161 smacker
smacker's picture


Their skill at lying thru their teeth with a straight face?

Wed, 06/05/2013 - 10:32 | 3626197 YC2
YC2's picture


Wed, 06/05/2013 - 11:43 | 3626438 Urban Redneck
Urban Redneck's picture

The need to identify the sacrificial lambs for when the CBs sit down and negotiate who lives and who dies.

Wed, 06/05/2013 - 12:19 | 3626539 falak pema
falak pema's picture

what  were they stress testing ?

If the banksta lies were less consequential than the CB printing press promises taken at face value as economic truths.

If monetary sleight of hand could make structural deficits of debt mountain into hard assets by a stroke of a pen. Now that there is no growth in Eurozone they all know this game is running out of time and dribbling into 100% new money recycling to maintain banks; not sustain the economy. Asymptotes are like icebergs. You can't rebound off them like Superman. 


Wed, 06/05/2013 - 12:47 | 3626634 Cacete de Ouro
Cacete de Ouro's picture

Given that gold and gold receivables comprise a large percentage of central banks' international reserves, surely the audit should check and publish whether the gold actually exists or whether its on 'deposit' with the bank of nova scotia or barclays etc, or swappped out in a gold swap.

O wait, I forgot that this would be 'highly market sensitive' information and that the IMF bodss were bullied by the ECB, Bank of England, Bundesbank, Banque de France, FRBNY, US Treasury and BIS into caving in and endorsing the gold and gold receivables shenanigans...We wouldn't want anyone to see the extent of this deception now would we.

So the compliant beancounters will be told, nothing to see, you see the balance sheet should say gold and gold receivables, look the IMF said so..

Wed, 06/05/2013 - 12:52 | 3626663 Cacete de Ouro
Cacete de Ouro's picture

Sorry, I thought they were stress test auditing central banks' balance sheets...call my naive then.....naive!.:)

This obviously never would happen in public...

Wed, 06/05/2013 - 10:03 | 3626104 astoriajoe
astoriajoe's picture

That seems like it exactly. They do it over the weekend and have time to spare for Octoberfest beers in September.

Oh the knock-on effects. The great reset, financed by muppet depositors. Someone post that kermit graphic, please.

Separately, in this week's Economist:


Towards the End of Poverty is the cover. Seems to me, in Europe, Poverty is just getting started.

Wed, 06/05/2013 - 10:13 | 3626136 Temporalist
Temporalist's picture

I hear it's never been easier to apply for a student loan...

Wed, 06/05/2013 - 15:52 | 3627378 Quantum Nucleonics
Quantum Nucleonics's picture

We should probably differentiate between getting Cyprused and getting Corzined.  The former is when your government skims it to cover said government's funding issues.  The later is when the politically connected head of your bank (or other financial institution) transfers your deposit to the bank of one of his politically well conneted buddies after taking a sizable chunk for himself.

Neither is particularly pleasurable for the depositor, and I suppose being both Cyprused and Corzined even less so.

Wed, 06/05/2013 - 09:54 | 3626077 freewolf7
freewolf7's picture

Parallel process, i.e., we learned how to lie from you, boss.

Wed, 06/05/2013 - 10:03 | 3626106 bank guy in Brussels
bank guy in Brussels's picture

Yes it is funny

But something is really up here

Partly it may be the tug-of-war between Mario Draghi and the ECB and Angela Merkel, who is trying to keep everything in Europe on hold till the German election

Mario may be posturing to get Merkel to agree to a deal ... if she gets re-elected - with Mario's help in keeping things afloat till then - then after she gets re-elected, she agrees to print money like a post-Keynesian whore ... in order to reverse the collapse of the Southern part of Europe

There are signs of this already in the 180-degree turn in the remarks of cranky and ornery German finance minister Schäuble ... things in southern Europe are so bad it is on the verge of blowing up the German banks and Germany itself, and Schäuble is talking like he wants to print

Article above speaks of deposit confiscation like in Cyprus

Good question is whether Mario Draghi went along with that in Cyprus, or was totally opposed to it along with Ben Bernanke, as Jim Sinclair says ... Sinclair believes the Cyprus confiscation, pushed by Lagarde, is the reason Ben Bernanke cancelled going to Jackson Hole and indicated he would not seek another term at the Fed

If there is another deposit confiscation in Europe, like Cyprus, but in a different country, Europe and its banks will totally implode ... Lehman Brothers x 5 and maybe the global economy as well

People halfway believe the shite that Cyprus was 'unique', but a 2nd confiscation will blow everything sky-high, as Mish likes to say

Mario Draghi is a wily one, and this threat to expose the dirty linen of the EU banks - including Deutsche Bank with its world-class-leading 75 trillion of derivatives as ZeroHedge has documented - is very likely a well-planned chess move by Mario

Wed, 06/05/2013 - 10:22 | 3626155 Dr. Engali
Dr. Engali's picture

What a sad a pathetic country we have become when we have to strap a hog trough to our necks, because we are too lazy to lift a peice of horse meat to our mouths.

Wed, 06/05/2013 - 10:28 | 3626183 Sudden Debt
Sudden Debt's picture

I'll bitchslap the first moron I see wearing one.

Wed, 06/05/2013 - 10:53 | 3626259 reload
reload's picture

Is that REAL ....were thise pictures released on April 1st?

I am fucking shocked - what type of person polled my market research firms would have given them belief this was a winner.

Burger King is revolting anyway, I would need to be very drunk to eat one. Having one strapped to my neck would make me puke.

Wed, 06/05/2013 - 11:04 | 3626303 BigJim
BigJim's picture

I particularly like the shot showing a man giving CPR wearing one.

Flip her over, amigo... 

Wed, 06/05/2013 - 14:57 | 3627195 Non Passaran
Non Passaran's picture

BS! They taste okay.

Probably not the healthiest meal, but who cares. As long as you don't eat it all the time...

Wed, 06/05/2013 - 10:56 | 3626268 shovelhead
shovelhead's picture


design fail.

True hands free means the burger must rotate and advance closer to the mouth as the diameter is diminished.

A simple single ram function may be too abrupt for many consumers....

Wed, 06/05/2013 - 11:14 | 3626338 Nue
Nue's picture

What's wrong with that? All beasts of burden have feed bags.

Wed, 06/05/2013 - 23:39 | 3628623 not applicable
not applicable's picture

As the last picture (with the woman driving so that her hands are on the steering wheel and not the burger) illustrates:     another revolting idea in the name of security

Wed, 06/05/2013 - 09:51 | 3626060 orangegeek
orangegeek's picture

Who gives a flying fuck?


Euro banks were stress tested years ago - everything AOK!!!


These fucking assholes just diddle the numbers and then spew it to the media to let the lemmings know that their life savings is in good hands.



Wed, 06/05/2013 - 09:52 | 3626068 Sudden Debt
Sudden Debt's picture



Wed, 06/05/2013 - 10:08 | 3626127 DeadFred
DeadFred's picture

Because everyone around here knows you're not fine.

Just joking, have a nice day.

Wed, 06/05/2013 - 09:57 | 3626085 Bearwagon
Bearwagon's picture

You don't mean these two lemmings, do you? ;-)


(Translation: The first two lemmings. One say's: "You first", the other one answers: "No, you first!")

Wed, 06/05/2013 - 09:51 | 3626062 Sudden Debt
Sudden Debt's picture

I don't see it...

Wed, 06/05/2013 - 09:51 | 3626063 sodbuster
sodbuster's picture

You mean there MAY be NO sta-bil-a-tee????

Wed, 06/05/2013 - 09:57 | 3626082 Sudden Debt
Sudden Debt's picture





coloured... also racisme...

toned.... also racisme...

non white.... WRONG! HE'S HALF WHITE!



Wed, 06/05/2013 - 09:51 | 3626064 Bearwagon
Bearwagon's picture

The picture should possibly look more like this:


Wed, 06/05/2013 - 09:52 | 3626067 Winston Churchill
Winston Churchill's picture

Bankers lying,


Wed, 06/05/2013 - 09:53 | 3626069 gdogus erectus
gdogus erectus's picture

ECB.  Couldn't they find a better actor for this skit?

Wed, 06/05/2013 - 10:02 | 3626109 GolfHatesMe
GolfHatesMe's picture

Like Bill Murray as Ned Ryerson?

Wed, 06/05/2013 - 09:53 | 3626070 gdogus erectus
gdogus erectus's picture

Double post.  I'm two for two this morning.

Wed, 06/05/2013 - 09:53 | 3626073 EscapeKey
EscapeKey's picture

Dexia and Bankia will no doubt receive doubleplusgood ratings.

Wed, 06/05/2013 - 10:11 | 3626133 Dr. Engali
Dr. Engali's picture

Right now they are on doublesecret probation.

Wed, 06/05/2013 - 10:32 | 3626193 hmmmstrange
hmmmstrange's picture

It's got to be pretty bad if you are trying to swap assets with Dexia or Bankia. Their phones are ringing off the hook.

Wed, 06/05/2013 - 09:53 | 3626074 aleph0
aleph0's picture

ROTFLMAO .... and who's going to Audit the Auditors ?

... "AA"  still around ?

EUSSR :  Dig a hole  ;  Fill it in ;  Repeat


Wed, 06/05/2013 - 09:53 | 3626075 the not so migh...
the not so mighty maximiza's picture

this might indicate someting is about to happen, they are trying to look proavtive, like it matters now

Wed, 06/05/2013 - 09:55 | 3626080 Dollar Bill Hiccup
Dollar Bill Hiccup's picture

The banks will get an "A" because they are all highly stressed ...

Wed, 06/05/2013 - 09:57 | 3626083 keninla
keninla's picture


"ECB appears to be questioning the reliability of the banks own figures."


No shit!!!!  How can you trust any institution anymore. They all lie.


Remember this:

"The information in this report is taken from sources believed to be reliable; however, the Commodity Exchange, Inc. disclaims all liability whatsoever with regard to its accuracy or completeness. This report is produced for information purposes only."

Wed, 06/05/2013 - 10:22 | 3626158 lakecity55
lakecity55's picture

"The information in this report..............is so we can later pay out in fiat and not get litigated."

Wed, 06/05/2013 - 09:56 | 3626086 aleph0
aleph0's picture

BK is BK .... no matter hw many times you "do" the books.

Wed, 06/05/2013 - 09:56 | 3626087 MaxMax
MaxMax's picture

Early next year!  Well, I guess that will kick the can down the road for another 6 months to a year.  Give me a break!  Like they would ever say anything negative to the public about the banks balance sheets.  Stupid show.

Wed, 06/05/2013 - 09:57 | 3626090 smacker
smacker's picture


Yeahbut ... will the ECB attempt to mark-to-market the banks' balance sheets? And then order the results to be published? Methinks not. That would surely create complete hell and bring down 80% of EU banks thru insolvency.

Wed, 06/05/2013 - 10:01 | 3626105 LawsofPhysics
LawsofPhysics's picture

Exactly, do you mind if I have a look at the underlying assets and collateral motherfucker?

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