ECB not yet decided on method of bank assessment

10 July 2013

The European Central Bank (ECB) has not made a decision on the method it will use to assess the banks under its supervision, according to a prominent policymaker.

Reuters reports Joerg Asmussen said a choice will be selected after the summer period is over and reports of huge capital shortfall in some banks in Europe are merely "guesses".

The ECB will take over the supervision of banks in 2014 and is now preparing a balance sheet assessment and an asset quality review of institutions. These will then work into an overall stress test, which will be conducted by the European Banking Authority, with guidance from the central bank.

Mr Asmussen told Reuters he had seen reports of large capital shortfalls that are yet to be revealed in the European banking sector.

"This to me is a bit funny because we have not decided how many banks we are talking about that fall under the stress test - because these are only the banks that fall under direct ECB supervision," he remarked.

By Gary Cooper

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