Regulators to outline stress test methods Wednesday: sources
European bank supervisors plan to outline on Wednesday the methodology used in their stress tests of Europe's biggest banks, sources familiar with the process said on Tuesday.
Euro zone policymakers hope the tests will boost confidence about the health of the region's 100 top banks and about Europe's ability to deal with problems, but uncertainty about the tests' design and disclosure level has led to new skepticism in the market.
While details about the tests' design are still under discussion -- including the final list of participants and the level of detail to be released for every bank -- the release could help markets to gauge how useful the tests will be.
The CEBS (Committee of European Bank Supervisors) wants to explain the methodology, one source involved in regulators' discussion about the stress tests said. This source said CEBS had also planned to say which banks participated in the tests.
The design includes scenarios on possible write-downs of euro zone sovereign bond holdings, and those scenarios will be different for different countries, two of the sources said.
They dismissed reports that a uniform 3 percent haircut scenario would be applied to all euro zone government bonds.
However, other sources said that discussions with German authorities had still not concluded about which German banks should take part -- and would therefore be included in the publication of the test results.
There are still some problems on which German banks should be included, said one senior European Union source.
Another EU source added: The question of the German banks remains widely open.
The results of the tests are due to be published on July 23.
(Reporting by Julien Toyer in Strasbourg, Philip Halstrick in Frankfurt and Boris Groendahl in Vienna; Editing by Susan Fenton)
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