The European Central Bank favors requiring banks to show they can retain capital worth 6 percent of their assets when it puts them through a simulated recession later this year, said two euro-area officials with knowledge of the matter.
A majority of policy makers and technical officials have reached consensus on the benchmark for the ECB’s stress test, the people said, asking not to be identified as the deliberations are not public.
The threshold must still be agreed on with the European Banking Authority that coordinates the exams, and a small number of countries wanting an easier benchmark may press for a compromise lower than 6 percent, one of the people said.
A benchmark of 6 percent would be tougher than the 5 percent set by the London-based EBA in 2011, when tests failed to spot shortcomings at banks that later collapsed.
Policymakers say they’re determined to convince investors that their health check of institutions is thorough and credible as the ECB prepares to take over supervision of about 130 euro-area lenders from France’s BNP Paribas SA to Bank of Valletta Plc in Malta.
An ECB spokeswoman declined to comment on the specific number, saying a final decision has not yet been taken and any decision needs to be coordinated with the EBA.