Daniele Nouy said that the ECB was making steady progress in its review of the health of major eurozone banks, a key step on the path to a closer banking union for the currency bloc bruised by a financial crisis.
The asset quality review (AQR) aims at ensuring that all banks' coming under the ECB's supervision have sound balance sheets with no hidden risks. "Let me emphasise that the actual execution of the AQR is on track", Ms Nouy said in a speech at a seminar on banking supervision in Helsinki.
Once the comprehensive results for the AQR and for parallel European-wide bank stress tests are published in October, they will reveal capital shortfalls at some banks, Ms. Nouy added. These "banks will have to build up capital buffers, thereby leading to a more resilience in the financial system", she said.
The AQR scrutinises minutely the banks' loan portfolios and valuations of their most exotic financial derivatives while the stress tests gauge the banks' ability to withstand various adverse operational scenarios. Some 6,000 official supervisors and auditors hired from private-sector consultancies are now working on the AQR on site at banks, Ms Nouy said.
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