The European Central Bank said that stress-testing of the Eurosystem’s financial stability arrangements confirmed that it is prepared for systemic disruptions.

The ECB said that the Eurosystem central banks have carried out stress-testing exercises relating to the ability of the Eurosystem to address effectively a financial crisis with the potential for systemic implications across several countries in the euro area. The most recent exercise took place in May and its findings were discussed by the Governing Council in October.

“The conduct of the exercises confirmed the preparedness of the Eurosystem for dealing with potentially systemic events that affect the euro area’s financial system. The exercises also contributed to the improvement of the existing arrangements for managing financial crises in the EU,” it said.

The exercises involved all the relevant central banking functions, including the conduct of monetary policy operations, the oversight and operation of market infrastructures, and the safeguarding of financial stability. Given the high degree of financial integration within the euro area, the exercises placed particular emphasis on the systemic interlinkages between the components of the financial system, including institutions, markets and market infrastructures, both on a national and on a cross-border basis, the ECB reported. The exercises were aimed at testing and further enhancing the Eurosystem’s effectiveness in addressing a crisis situation.

The Eurosystem will continue to test and enhance the effectiveness of its arrangements for financial stability with respect to coping with potential shocks to the euro area financial system.