ECB discovers why transparency into bank current exposure details needed

Reuters reports that the ECB has discovered why transparency into bank current exposure details is needed.

Policymakers at the European Central Bank had initially hoped that the asset review would feed into the stress tests in part because it is difficult to measure the sturdiness of a bank without knowing precisely the contents of its balance sheet.

Please re-read the highlighted text as your humble blogger has been saying this since the beginning of the financial crisis.

Without ultra transparency, there is simply no way of knowing if a bank is sturdy, as in solvent, or unstable, as in insolvent.

Without ultra transparency, stress tests are meaningless.