A frequent objection raised by the banks to having to disclose their current exposure details is investors won’t be able to assess this much data.  BlackRock shows this objection is totally and completely false.  How?  The ECB hires BlackRock to help it assess the EU banks by looking at their current exposure details.

The ECB relies on BlackRock to assess the current exposure details for many of the EU’s larger banks.  Or at least that is what the Chair of the ECB’s Supervisory Board said.

BlackRock provides support to ECB Banking Supervision with regard to stress-testing. The specific arrangements are laid down in a framework agreement which was awarded to BlackRock following a public procurement procedure conducted by the ECB. A contract notice was published in the Official Journal of the European Union on 26 December 2015.1

Regarding your question as to why the ECB asked for the support of private companies, please note that, to deal with time-critical and resource-intensive projects such as stress tests, ECB Banking Supervision sometimes resorts to external service providers.

What exactly does BlackRock do?

Reuters reports

The tests uncover sensitive information about banks, such as how many of their loans are likely to go unpaid, ….

The consultancy arm of BlackRock, BlackRock Solutions, has experts who help diagnose risks, for example, or put a value on risky loans.

Of course, as a result of having seen the EU banks’ current exposure details, BlackRock has an enormous informational advantage over other investors.

The ECB says it deals with the potential conflicts of interest that might arise from this enormous informational advantage through terms of its contract with BlackRock.

There is a better way than relying on contract terms.  Make all the banks disclose their current exposure details.  Then, like BlackRock, any interested investor or third party expert can assess this data.