11  Bonfim, D. and M. Kim, “Liquidity Risk in Banking: is there herding?”, mimeo, Banco de Portugal, 2013. 12  Clerc, L., Derviz, A., Mendicino, C., Moyen, S., Nikolov, K., Suarez, J., Stracca, L. and Vardoulakis, A. (2013), “Assessing Capital Regulation in Macroeconomic Model with Three Layers of Defaults”, mimeo. 13  Nguyen, T. (2013), “Bank Capital Requirements: A Quantitative Analysis”, mimeo.
As I just mentioned, this is one of the main benefits of European banking supervision. The next step is then to derive an automated score. This score is based on indicators such as the return on assets and the cost-to-income-ratio. And as I already said, we then complement the scoring with expert judgement. In doing so, we take a forward-looking approach.