ING Bank is one of around 130 'significant' European banks that are taking part in the Comprehensive Assessment conducted by the European Central Bank (ECB) in the run up to its new role of direct supervisor to those significant banks. The Asset Quality Review (AQR) is an important part of this overall assessment which is widely viewed as the most comprehensive assessment of the strength of the Eurozone's major banks ever to be conducted on such a scale.

Here we want to provide some basic information on the AQR in general and its impact on ING.

We are happy to do all this work as it will improve transparency of banks, which in turn can help to restore trust in the industry.

What exactly is being reviewed?

The AQR's objective is to determine the quality of the assets of the participating banks. To do this, the review includes a large part of the balance sheet, taking into account both credit and market risk exposures. Portfolios selected for review vary from bank to bank and are selected based on their materiality and risk contribution to the bank's entire portfolio.

Banks are assessed at consolidated level. This means that for ING, with its global headquarters in the Netherlands, the Dutch Central Bank (DNB) is in the lead and liaises with local regulators if they require assistance on cross-border work.

Impact on ING's day to day business

At ING, a couple of hundred people are working fulltime on the project, based at both the head offices in Amsterdam and abroad. Because of the multi-disciplinary nature of the AQR, representatives from all major functions such as Risk Management, Finance and Legal are involved, working closely together with employees within the various ING businesses in scope. Together, they work on data requests, amounting to several millions of data fields which they analyse and submit to the ECB. Wilfred Nagel, Chief Risk Officer of ING Group, has assumed overall oversight of the project.

Nagel: "It is a labour intensive and time consuming project that we are all dedicated to complete successfully within the short time frame that we have been given. We are happy to do all this work as it will improve transparency of banks, which in turn can help to restore trust in the industry."

Project timelines

As mentioned above, the AQR is part of the Comprehensive Assessment. The AQR project will be followed up with a stress test for all participating banks as well as most other European banks. The overall outcome of the Comprehensive Assessment will be published before the ECB officially assumes its supervisory role in November 2014, and will include the findings of all phases.

More information on the supervisory role of the ECB is available at http://www.ecb.europa.eu/ssm/html/index.en.html

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