FRANKFURT (Reuters) - Bosses from top euro zone banks were gathering at the European Central Bank on Wednesday to find out what it will be looking for in its upcoming "stress tests" on their balance sheets.
Before the ECB takes up its new role supervising euro zone banks from late next year, it plans to run a series of rigorous tests to uncover any possible shortfalls on the lenders' balance sheets to avoid any surprises once it has taken charge.
Wednesday's briefing is the first of three meetings the ECB has set up with the chief executives or chair persons of the bloc's 128 largest banks at which they will have the opportunity to ask questions about the review it will hold next year.
The meetings will be chaired by ECB President Mario Draghi, his deputy Vitor Constancio and the head of the ECB's financial stability division, Ignazio Angeloni.
Gerd Haeusler, CEO of German state-owned lender BayernLB
BayernLB Chief Financial Officer Stephan Winkelmeier said during the quarterly earnings conference call: "During this setting up phase, we will be well advised to have an intensive exchange so that the whole exercise will reveal a reliable picture of the European banking sector before the ECB takes charge."
In addition to German banks, executives from lenders in Belgium, Cyprus, Malta and Luxembourg are due to attend the meeting on Wednesday. The other meetings are scheduled for Nov 18 and Nov 25, an ECB spokeswoman said.
UniCredit CEO Federico Ghizzoni will take part in the Nov 25 meeting. "They have started calling in the CEOs of banks," he said on Tuesday.
The ECB and national bank supervisors are in the process of selecting certain portfolios for the asset quality review, which will be different from country to country, depending on where the main risks are expected to be.
In the asset quality review, the ECB will check whether banks have classified loans correctly and whether they have set aside enough capital to deal with loans that are unlikely to be repaid.
(Reporting by Eva Taylor and Andreas Kroener in Frankfurt, Silvia Aloisi in Milan; Editing by Hugh Lawson)