Is the European Central Bank Still Solvent?
LONDON, March 27, 2012 /PRNewswire/ --
- Navigant/European Central Bank Debate: "The ECB and Its Balance Sheet"
OMFIF (Official Monetary and Financial Institutions Forum) will host a debate with Navigant and the European Central Bank (ECB) at the Reform Club in London on 28 March 2012 entitled: "The ECB and its Balance Sheet: Valuation and Risk Management." The ECB will be represented by Francesco Papadia, Director General, Market Operations, who will talk frankly about the risks being taken on by the euro area central banks.
The debate is timely. As the euro area's balance sheet passes euro 3 trillion, the market is concerned about the euro 1.4 trillion advanced by the euro area central banks to distressed sovereigns/financial institutions and the euro 750bn off balance sheet liabilities of the ECB itself under TARGET2. Navigant will present and debate their assessment of the risk associated with these support operations and the economic losses already incurred but not recognised. Navigant will also review the accounting treatment of TARGET2 under international accounting standards.
"The European sovereign crisis has forced the euro area central banks to take significant risk but the ECB has not adapted its risk management reporting to stakeholders. We consider there to be a significant risk that a country will leave the euro and losses will be crystallised," comments Gene Deetz, Managing Director of Navigant Capital Markets Advisers. "This raises serious questions with broad-reaching implications. Despite a lack of transparency and significant difficulty in getting behind the numbers, we have been able to illuminate many of the critical valuation and risk issues."
In addition to Deetz and Papadia, the debate panelists will include David Marsh, Co-Chairman of OMFIF; Cornelia Meyer, Chairman and CEO of MRL Corporation Francesco; and John Nugee, Vice-Chairman of the OMFIF Advisory Board and Senior Managing Director of State Street Global Advisors.
Navigant (NYSE: NCI) is a specialised, global expert services firm dedicated to assisting clients in creating and protecting value in the face of critical business risks and opportunities. Through senior level engagement with clients, Navigant professionals combine technical expertise in Disputes and Investigations, Economics, Financial Advisory and Management Consulting, with business pragmatism in the highly regulated Construction, Energy, Financial Services and Healthcare industries to support clients in addressing their most critical business needs. More information about Navigant can be found at http://www.navigant.com.
OMFIF is a global body for confidential dialogue between central banks, sovereign funds, regulators, public debt agencies and selected private sector financial institutions. More information about OMFIF can be found at http://www.omfif.org.
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