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Central bank says stress tests will 'strengthen confidence'

Markets will be reassured by 'soundness' after ECB examinations

04 February, 15:27
Central bank says stress tests will 'strengthen confidence' (ANSA) - Rome, February 4 - An assessment of Italian lenders to be conducted by the European Central Bank later this year should help to reassure markets and boost confidence, the Governor of the Bank of Italy Iganzio Visco said Tuesday.

He added that the tests by the ECB, including stress tests, should strengthen credit quality in commercial banks in Italy, "reassuring markets about the soundness".

The ECB is conducting a deep assessment of banks before it takes over bank supervisor duties for the entire euro area in November.

Mario Draghi, head of the ECB, has said the assessment is crucially important to restoring confidence in the banking system and encouraging economic recovery.

The tests are designed to measure whether banks have adequate capital to withstand future crises, including market shocks.

Weak banks contributed to the eurozone's financial crisis which in turn led to recessions including Italy's worst since the post-war period.