ECB to stress test top eurozone banks

|By:, SA News Editor

The European Central Bank plans to carry out comprehensive and uniform stress tests on 128 top eurozone banks over the next year as it aims to build confidence in the financial sector by improving transparency and implementing "corrective action" where needed.

The ECB intends to complete the tests by October 2014, a month before taking on its new supervisory role.

The central bank will ask the banks it's reviewing to provision 8% of their risk-adjusted capital as a buffer against losses on loans and other parts of their portfolio. Those with shortfalls will be ordered to make them up.

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