ECB published phase 2 details on AQR

On 11 March 2014 the ECB published a statement and manual on the second phase of the Asset Quality review. The objective is to examine €3.72 trillion ($5 trillion) worth of assets held by the 128 largest banks in the eurozone.

In the first phase of the AQR the ECB selected which bank portfolios would be examined – the final list includes €3.72 trillion worth of risk-weighted assets – and it will now “execute” the review.

The second phase will see the national competent authorities (NCAs) in each  country assess whether or not banks have correctly classified their credit exposures in these portfolios.

Also on 11 March 2014 the ECB released a manual to guide the NCAs through this phase. The manual explains the NCAs will only review a sample of the exposures in each bank’s portfolio on account of “the volume of analysis” necessary.

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