Eurozone bank stress tests set for 2016: Report

Europe`s banking supervisory board will carry out stress tests of big eurozone banks in 2016, according to an interview with the watchdog`s president Daniele Nouy released on Saturday.

"There will be a public and general stress test next year. It could only concern a part of the 123 banks that we supervise directly," Nouy was quoted as saying by German paper Die Welt.

Nouy, who heads the European Central Bank (ECB) supervisory board, gave no details on how the tests would be performed.

Since November the Single Supervisory Mechanism (SSM), an autonomous unit within the ECB, has been Europe`s banking watchdog and is directly responsible for monitoring 123 banking groups.

A stress test is a simulation of various scenarios of financial crisis that probes the strength of banks` balance sheets.

Nouy also said: "There is always smaller scale, targeted tests about specific risks. Whenever we ask a bank `What would happen if... ?` It is a type of stress test."

The watchdog led an extensive review last year of banking assets in the eurozone and a stress test that revealed capital needs at roughly ten financial institutions in the region.