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Regulators hope that more integrated bank oversight will make it easier to spot risks emerging and help prevent a repeat of a crisis that cost taxpayers billions of euros in bank rescues and state bailouts.
Before the European Central Bank starts supervising eurozone banks next year as a first step towards a planned banking union, it wants to take stock of the lenders' health. So far it has been unclear how such a review would fit in with stress tests planned by the European Banking Authority. "There will probably be an asset quality review done by EBA, a balance sheet assessment by the ECB as well as a stress test by EBA", Lautenschläger, who is in charge of banking supervision on the German central bank's board, told a journalist club event on Monday, in remarks that were released for publication on Tuesday. Neither EBA nor the ECB had made up their minds yet, she said and pointed to EBA's Board of Supervisors meeting on May 15-16, where it is due to decide how it will proceed with its checks.
The EBA is due to conduct stress tests of banks' vulnerabilities and separately analyse bank assets, while the ECB will sift through the balance sheets of the 130 banking groups it will be responsible for supervising directly.