Bundesbank: Bank assessment is supervisor\'s first test

Assessing the financial health of the eurozone\'s banks will be the first major test for the ECB as Europe\'s new banking supervisor, the Bundesbank said Thursday. \"It is the balance-sheet assessment which represents the greatest challenge in the months ahead of us,\" the German central bank\'s vice president Sabine Lautenschlaeger told a conference in Frankfurt. The European Central Bank \"needs a clear picture of the actual risk faced by the banks it will be supervising,\" she said. \"Moreover, light needs to be shed on which balance-sheet burdens arose under the watch of national supervisors.\" The ECB is preparing to take on new banking supervision tasks as part of a single supervisory mechanism or SSM. The SSM will create a new system of financial supervision comprising the ECB and the national bank supervisors of participating EU countries. Under the new system, the ECB will directly supervise the region\'s biggest banks, likely beginning sometime in late 2014. \"We therefore need a thorough and rigorous review of balance-sheets. This will be the first test of the SSM and of cooperation between the authorities involved. Though we don\'t have much time at all to accomplish this extremely complex task, I am convinced that, if we act in unison, we will succeed,\" Lautenschlaeger said.