FRANKFURT Jan 14 European banks will not be
required in upcoming stress tests to adjust their sovereign debt
portfolios they hold to maturity to reflect current market
values, the European Central Bank said in a letter published on
The issue of how banks' sovereign debt exposure will be
treated in this year's balance sheet assessment by the ECB and
the European Banking Authority is crucial for banks which loaded
up on sovereign bonds during the crisis and are now concerned
adverse test scenarios could get them into trouble.
On Tuesday, the ECB shed some light onto the matter.
"Sovereign exposures, both held-to-maturity and
available-for-sale exposures, will be included in the stress
test, although it is not foreseen that HTM portfolios will be
marked-to-market," the ECB said in a letter signed by its
president, Mario Draghi.
The letter, dated Jan. 10, was addressed to Sharon Bowles,
chair of the European Parliament's economic and monetary affairs
"Further details concerning the stress test will be
announced in late January or early February," it said.
(Reporting by Eva Taylor and Paul Carrel)