ECB official wants strict check of bank finances

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Associated Press

Posted on June 25, 2013 at 7:02 AM

Updated Tuesday, Jun 25 at 7:02 AM

FRANKFURT, Germany (AP) — A top European Central Bank official is calling for a "strict and thorough" review of bank finances before the ECB takes over from national regulators as Europe's top financial supervisor.

ECB rate council member Jens Weidmann, who also heads Germany's national central bank, says in a newspaper interview published Tuesday that a tough review will be necessary "to avoid unpleasant surprises later."

The ECB will review the quality of the loans and investments that Europe's larger banks have made.

Banks found to have weak finances could be pushed to increase their capital reserves against losses.

Shaky banks have been a key factor in Europe's financial and economic difficulties. The ECB says many smaller companies can't get credit because some banks' own finances are strained.

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