It will take place between today and next July 18th phase two of the ECB's asset quality review vis-à-vis Italian banks, according to a document which identifies the assessment activity carried out by the Bank of Italy in the context of the ECB's examinations in view of the launch of single supervision, a pillar of the banking union, in nine chapters.
We therefore start today with an examination of the relevant processes and policies of the banks as well as through the revision of the accounting approaches of the credit institutions. In Italy 15 groups are involved in the tests of the European Central Bank. The analysis of Phase 2, according to the road map established by the Bank of Italy, must be completed by 14 March. The other construction sites will open between March and April and some will last several weeks. This is the case of the revaluation at fair value of the so-called 'level III' portfolio securities, the riskiest, present only in the portfolios of the major Italian banks.
The last construction site to close, by 18 July next, will be that of the pro forma valuation based on the asset quality review, of the Cet1 capital ratio at the end of 2013. Common equity tier 1 is the bank's best quality capital, according to the new Basel definition3.
