Hundreds of banks set for stress tests as Eurozone lays out terms
THE EUROPEAN Central Bank (ECB) revealed the framework for forthcoming stress tests yesterday, as the institution prepares to take up a role as the currency union’s banking regulator later this year.
According to information on the asset quality review (AQR) published yesterday, the ECB will focus on 128 of the Eurozone’s biggest banks, and attempt to assess the standard of banks’ holdings before the tests.
The step is a major technical explanation of the new common standards, which will be used in stress tests later this year.
In November this year, the ECB takes its full supervisory role. Yesterday the central bank said it aimed to “enhance the transparency of the balance sheets of significant banks, trigger balance sheet repair where necessary, and rebuild investor confidence” with the exercise.