The European Central Bank (ECB) will soon require Eurozone banks to provide liquidity data on a weekly basis. The requirement, which will come into action in September, is part of the ECB’s efforts to ensure a better overview of their health and abilities to deal with economic challenges.
Andrea Enria, chair of ECB’s Supervisory Board, detailed the decision in a recent interview with Italian business news media outlet Milano Finanza. The banks were previously required to send monthly liquidity data reports, but Enria believes having more frequent updates will lower the risk of a future financial crisis.
“We have decided to send banks, starting in September, a request for information on a weekly basis in order to have fresher data that will allow us to better monitor liquidity developments,” Enria told the media outlet.
According to Enria, the financial markets still find themselves in a delicate phase due to rising interest rates, which have been moving at a fast pace, high inflation, and geo-political events. Still, he believes that banks in Europe are in a strong position despite all the challenges.
The European Central Bank is likely trying to avoid the type of banking crisis that the U.S. witnessed back in March as well as seeing situations similar to the collapse of Switzerland’s banking giant Credit Suisse.