Publication

This paper looks ahead to the publication on October 26th of two significant reports on the health of the eurozone banking system: The European Central Bank's (ECB) asset quality review (AQR), and the European Banking Authority's (EBA) stress test. The authors also point out that in its response to the AQR and stress test results, the ECB will need to perform a very difficult balancing act by demonstrating that it can be an impartial and unbiased supervisor, singling out possibly a series of banks that need to raise additional capital, while avoiding the creation of too much havoc in the markets.