Banks Face Scrutiny of Sovereign Debt in EU Stress Tests

European regulators will scrutinize banks’ calculations for losses on sovereign debt held to maturity when carrying out this year’s stress tests, Europe’s top banking supervisor said.

Financial watchdogs will “check what banks are doing with reference to some sovereign exposures and see whether they’re taking a conservative attitude” when valuing the assets, Andrea Enria, the chairman of the European Banking Authority, said in an interview in London.