The European Central Bank plans to take on 124 “significant” euro-area banks in its new supervisory role, according to a list obtained by Bloomberg News.
Germany has the most banks up for ECB scrutiny, with 24 banks including Deutsche Bank AG, Commerzbank AG and Bayerische Landesbank. Spain has 16 banks, Italy has 15 and France has 13 banks on the list. The Netherlands has 7 institutions represented on the preliminary list, which was circulated to European officials at the end of last week.
The ECB will assess the health of the banks’ balance sheets next year as it prepares to become the euro area’s top supervisor. ECB President Mario Draghi has urged the currency bloc’s nations to make sure they have public backstops in place for banks that are deemed to need more capital, and EU leaders meeting in Brussels this week will press to establish “all appropriate arrangements.”
The list includes banks which, as of the end of 2012, had assets of more than 30 billion euros ($41 billion) or that represent 20 percent of their home country’s gross domestic product, as spelled out in the law establishing the ECB’s oversight powers.
Authorities preparing the list also included banks that might have grown big enough to meet the review’s thresholds by the end of 2013 by adding in banks who had assets of at least 27 billion euros, or 18 percent of GDP, at the end of last year.
The top three biggest banks in each nation are automatically included, although in some cases they are subsidiaries of banks already on the list. Also, as spelled out in the Single Supervisory Mechanism law, the list includes banks that have received or applied for public assistance.
All other euro-area nations have between three and six banks on the list, except for Malta and Slovakia. All three of Slovakia’s biggest banks are owned by lenders already on the list, as is one of Malta’s. Two other Maltese banks are included on the list.