“It was a thorough health check of the banking system,” Danièle Nouy, who heads the central bank’s new bank supervisory arm, told members of the European Parliament in Brussels.
Ms. Nouy was implicitly answering criticism by some analysts that the central bank’s review was not tough enough on banks.
“We have done, in my view, very rigorous work,” she said, “and I am comfortable with the outcome.”
But, speaking a day before her agency officially takes charge of bank supervision in the eurozone, Ms. Nouy also said examiners had not had time to thoroughly scrutinize all the methods banks use to estimate their risk of losses.
In addition, when the central bank conducted stress tests of banks’ ability to withstand hypothetical economic shocks, it did not look at what would happen if the eurozone suffered deflation, a broad decline in prices that typically makes it harder for borrowers to pay back their loans. Many economists see deflation as an acute danger for Europe.
“A stress test cannot review all risks — it’s just impossible,” Ms. Nouy told the Committee on Economic and Monetary Affairs.
She said the shortcomings would be addressed as the new supervisory body, the Single Supervisory Mechanism, legally assumes overall authority in the eurozone on Tuesday, with broader powers to inspect bank books and compel banks to make changes in the way they do business.
“The risks that were not taken into account will be taken into account in what is coming next,” Ms. Nouy said.
The European Central Bank reviewed 130 banks, of which 13 were found to have capital shortfalls. Those banks must tell the central bank by next Monday how they will raise new money.
The bank with the largest capital shortfall, Monte dei Paschi di Siena, which is based in Italy, said on Sunday that it planned to sell new shares to raise the 2.1 billion euros ($2.6 billion) necessary to satisfy the central bank’s requirements. Shares of Monte dei Paschi rose 2.5 percent on Monday, a sign that investors welcomed the plan to raise more capital. But shares of the bank have still lost more than half their value in the last year.
Asked whether creation of a more unified European banking system would improve the flow of credit in the eurozone, Ms. Nouy said it would help. But, she said, much depends on whether investors are willing to provide banks with funds, and whether companies are confident enough about their prospects that they want to borrow the funds.
“We have done our job,” she said, “but other actors will have to do what they have to do as well, to make sure these results are a new departure for the economy.”
The European Central Bank has also been straining to encourage more lending and borrowing. On Monday, the central bank said it purchased about €3.1 billion in private sector assets during the last week as part of a program intended to help increase demand for credit. The purchases, of packages of loans known as covered bonds, brought the total to €4.7 billion two weeks after the program began.
Economists say that the sums spent so far are not large enough to have a big effect and that the central bank will eventually have to resort to purchases of government bonds, a much larger market.
The bank’s governing council meets on Thursday, and analysts will be listening for clues about whether large-scale purchases of government bonds are becoming more likely.