The exercise has already contributed to a further strengthening of the capital base of banks and for some of them further efforts will be needed, once the results of the comprehensive assessment are known. The ultimate aim of the exercise is to enable euro area banks to strengthen their capital base and thereby substantially increase their credit provision capabilities.
The sharp surge in capital outlays during the past five years apparently reflected the availability of higher rates of return on a broad spectrum of potential investments owing to an acceleration in technological advances, especially in computer and telecommunications applications. BIS Review 69/1998  -6-  This is the apparent root of the recent evident quickened pace of productivity advance.