Fresh capital has been raised, problematic legacy assets have been removed and, as a result, Core Tier 1 ratios of the largest euro area banks now stand at 11%, well above the new Basel III capital requirements. But more must be done and progress is on its way in the form of a European banking union.
Before the first element of the banking union, the single supervisory mechanism, takes up its role, a comprehensive balance sheet assessment must be undertaken. This task has recently begun.