European Central Bank to identify weak banks; step considered key to eurozone recovery

Industries Associated Press

The European Central Bank says it will reveal the results of its much-awaited review of bank finances on Sunday, Oct. 26.

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The exercise is an attempt to purge so-called zombie banks that are too troubled to make new loans and support the struggling eurozone economy.

The idea is that the review will force weak banks to either fix their finances or be restructured or sold — and help growth.

The ECB will say which of 130 big banks need more capital as a buffer against losses, based on a review of their finances and on stress tests of how they would fare during economic turmoil.

The ECB said Friday that banks that flunk will have two weeks to say how they intend to raise more capital.