ECB supervision of failing banks is flawed, auditors warn

The European Central Bank has "flaws" in its procedures for identifying and dealing with banks in crisis, European Union auditors said on Tuesday.

The European Court of Auditors, a European Union agency, cast doubt on the ECB's supervision of the big banks in the eurozone and criticized the central bank's reluctance to disclose relevant information. But it stopped short of saying the flaws could have an impact on the way an actual crisis was addressed.

After the 2007-08 global financial crisis, the ECB has added to its monetary policy functions the task of supervising the top banks of the eurozone's 19 countries. It oversees around 120 banks that hold over 80 percent of the bloc's banking assets.

The ECB's supervisory unit - the Single Supervisory Mechanism (SSM), chaired by French regulator Daniele Nouy - has sweeping powers to spot and tackle emerging troubles...