* SSM's Nouy says has received over 14,000 job applications
* National regulators to play major role in 2014 assessment
* Irish banking sector moving in right direction -Nouy
(Adds detail, Irish regulator quotes)
By Padraic Halpin
DUBLIN, June 23 There is sufficient liquidity in
the market if euro zone banks want to raise more capital as they
prepare for pivotal stress tests later this year, the bloc's top
regulator said on Monday.
The ECB's Single Supervisory Mechanism (SSM) is preparing to
run the rule over almost 130 lenders it will begin supervising
from November in stress tests billed as the toughest yet after
previous exercises failed to convince markets.
Banks have taken action on capital ahead of the tests and
strengthened their balance sheets by 104 billion euros in the
nine months to April through, for example, capital hikes or
increased provisions, the ECB said at the time.
"The markets are in a reasonably benign situation and there
is liquidity ready to be invested in banks, in equity or
funding, if the markets are convinced by the transparency
exercise that we are undertaking," Daniele Nouy, chair of the
Supervisory Board of the ECB, told reporters when asked if the
ECB expected banks to carry out more capital raising.
The ECB's review, aimed at encouraging banks to recognise
losses on loans or investments that have gone bad so that they
can regain investor trust and help the euro zone's fragile
recovery, was well on track to achieving its goals, Nouy said.
Speaking at a conference attended by chief executives and
senior officials from Ireland's main banks, Nouy said the SSM
had received over 14,000 applications for 800 jobs it plans to
fill by the end of the summer.
The ECB had said at the end of May that it had received
8,000 applications for SSM jobs, which have a top salary of
245,000 euros a year and enjoy the low tax rates of those
working for a supranational authority.
NATIONAL SUPERVISORS ROLE
Nouy, formerly a French regulator, said the ECB would
publish a guide to the supervisory practices and methodology of
the SSM before it takes on the role of supervisor, to ensure
She added that national supervisors would play a "major
role" in this year's assessment and that the ECB would largely
rely on them to provide the risk assessment and Supervisory
Review and Evaluation Process (SREP) elements as its own systems
need further field-testing.
One of those regulators, Irish Central Bank deputy governor
Cyril Roux, said he expected a first submission of an
interrogation of loan books as part of the SSM's asset quality
review to be made at the end of the month.
Roux, the country's head of regulation, also said that the
Central Bank would review its supervisory model for smaller
banks, many of whom are based in the Irish Financial Services
Centre, Ireland's venue for international finance.
Ireland's local banks, a rescue of which which cost the
state the equivalent of 40 percent of annual output, will be
subject to the ECB's tests. Nouy said that while work was still
needed, particularly on troubled mortgages, the restructured
Irish banking sector was moving in the right direction.
"What had to be done has been done or is being done and the
Irish banks at the end of these reforms will be able to finance
the economy," she said.
(Editing by Catherine Evans)