ECB Ramps Up Scrutiny of Banks’ Response to Energy Crisis (1)

The European Central Bank is intensifying discussions with bank executives over their readiness for a potential surge in company defaults and a drying-up of energy-market liquidity, amid the worsening stand-off over Russian gas supplies.

The Frankfurt-based bank watchdog wrote to lenders last month, telling them to analyze the impact of a gas stoppage on their businesses, according to people familiar with the matter. Responses are due in mid-September, and follow-up conversations are to come by the end of this month, said the people, who asked to remain anonymous as the interaction isn’t public.

Europe’s efforts to stave off a ...