BERLIN, Feb 16 (Reuters) – The head of the euro zone’s
bailout funds, Klaus Regling, said that he believes banks in
Spain, Portugal, Cyprus, Greece and Ireland are in good shape
and that there will not be any surprises in European Central
Bank stress tests due later in 2014.
In an interview to appear in Monday’s Sueddeutsche Zeitung
newspaper, the head of the European Stability Mechanism (ESM)
said the five countries were benefiting from rising exports and
economic growth was returning. He said it was important that the
reforms continue.
“The banks in the programme countries are in quite good
shape,” Regling is quoted as saying. “I expect that there won’t
be any big surprises in Spain, Portugal and Cyprus. The same is
the case for Greece and Ireland.”
The ECB’s asset quality review, an assessment of the balance
sheets of more than 120 banks due to be completed next autumn,
should bring transparency on the quality of banks’ loans and
other assets.
Bankers say that the latest checks on capital and stress
tests of banks’ resilience to shocks must be rigorous, pointing
to the 2011 tests that found no weaknesses among Spanish and
Irish banks, even though the countries subsequently asked for
bailouts of their banking sectors.
European Monetary Affairs Commissioner Olli Rehn has said
that banks are already preparing for the results of the stress
tests by raising capital on the market, with about 80 billion
euros ($109.49 billion) raised to strengthen banks over the past
couple of years.
