In turn, this should lead to improvements in credit conditions for the real economy. For these effects to materialise, two elements are absolutely crucial. First, we need to succeed in establishing transparency. In order to positively impact on investors’ perceptions of euro area banks, we must ensure that the exercise is sufficiently thorough for a true understanding of the banks’ condition.
Any remaining uncertainty and doubts would be counterproductive. Second, any weaknesses identified must be addressed in a swift and decisive manner. Findings such as a lack of provisioning or the mis-valuation of assets must lead to direct and effective corrective actions, which ensure that adequate capital levels are reached or maintained.