European Central Bank plans to review asset quality next spring

City A.M. Reporter
BANKS across Europe will have to have their assets analysed before the European Central Bank (ECB) starts supervising in the first quarter of 2014, ECB executive board member Joerg Asmussen said yesterday.

Speaking at an event organised by the Green Party, Asmussen said the ECB would conduct such a review with the help of national supervisors and external analysts.

“The asset quality review of the banks that the ECB will supervise directly is an important measure, which we have to take seriously,” Asmussen said.

He added that if a separate bank resolution mechanism is unable to start operations when the ECB takes over banking supervision, the European Stability Mechanism bailout fund could be used for such purposes for some time.

A series of asset reviews and stress tests is due to take place next year as markets are still worried that Eurozone banks are sitting on large pools of bad loans and will not be able to survive by themselves if official support is reduced.