and supervisory authorities to assign sizeable resources ; it will also involve the leading european audit and asset valuation firms. the ecb estimates that, not counting supervisory staff and bank employees themselves, more than 1, 000 people will work on the exercise. remember that the portfolios selected for the review amount to 58 % of the risk - weighted assets of the 128 institutions, i. e. some €3. 72 trillion, which will involve reviewing in detail an average of 1, 250 credit records per bank. in spain, we calculate that the review will affect assets valued at €663 billion, and will require the analysis of more than 21, 000 loan records. the second part of the assessment will consist of the stress test. the aim of this exercise is to analyse the ability of banks to maintain appropriate solvency levels in two different scenarios : a baseline or more likely scenario, and another alternative, highly adverse scenario, with less likelihood of occurrence. the stress test is being developed in collaboration with the european banking authority ( eba ). the methodology of the exercise is currently at the review stage following the finalisation some days back of the public consultation process. the final version of the methodology and details of the macroeconomic scenarios are expected to be published towards the end of this month. the implementation and quality control stages of the stress test will commence from next month, meaning there will be some overlap with the asset review exercise. the outcome of the comprehensive assessment will be made known in late october, and will include both the results of the asset quality analysis and of the stress test. as indicated on several occasions, the overall aim of the comprehensive assessment of banks is two - pronged : on one hand, the exercise seeks to offer a high degree of transparency concerning the situation of banks whose supervision will be conducted by the single supervisory mechanism as from november ; on the other, it intends to promote the recapitalisation of those viable institutions that show insufficient levels of solvency. both bis central bankers ’ speeches avenues will help reinforce the credibility of european banks ahead of the transfer of the supervisory function to the new authority. i should emphasise that it would be mistaken to quantify the value of the stress test in terms of the capital requirements it brings to light ; and even more mistaken to measure its success on the basis of the proximity of the final result to the relatively sizeable estimates in the analyses published so far which, often, have been lacking in information and rigour. experience shows that,

reform involving the clean - up of balance sheets, recapitalisation and restructuring, and the resolution of non - viable institutions under the recently concluded financial assistance programme. as you will recall, this process rested largely on an asset quality review exercise and a stress test similar to those now being undertaken as part of the preparations for the single supervisory mechanism. there are, in any event, some notable differences that should be taken into account when comparing both exercises. for instance, the spanish asset review exercise involved an bis central bankers ’ speeches exhaustive analysis of all domestic business, while its european counterpart will review a selection of portfolios, albeit encompassing both domestic and foreign - based business. further, although the 2012 stress test envisaged a highly adverse macroeconomic scenario, its focus was on the loans portfolio of institutions in spain. conversely, the scope of the european exercise will be much broader, including in its adverse scenario shocks – both at the level of the global economy and at that of each national economy – that affect all types of exposures, including the sovereign debt portfolio. all told, spanish banks ’ starting position ahead of the new exercise can generally be confirmed as relatively favourable, if we consider the disposals of problem assets, especially by the most vulnerable banks, the recognition of impairment of the assets most affected by the crisis and the sizeable increase in all banks ’ loss - absorption capacity. 4. beyond the analysis exercise in any event, the exercise will, irrespective of its final result, be a good opportunity to reflect on the relative strengths and weaknesses of the spanish banking sector. and this can provide a platform for banks to take strategic measures enabling them to strengthen their competitive position in the new institutional framework. in this connection, the regional diversification of the major banks – following a model of stand - alone subsidiaries, in terms of both capital and liquidity – has clearly been an advantage that has enabled them to soften the impact on their profits of adverse but not synchronised macroeconomic developments in different economic regions. also worth highlighting is their proven capacity to obtain high levels of profitability in the retail business and to maintain the value of franchises, despite the shortcomings evidenced in the selling of loan and deposit products. mention may also be made of the traditional conservatism in provisioning policy, advocated by the supervisor, which has enabled banks considerably to ease the impact of the economic crisis on their solvency levels. on this latter point, the necessary harmonisation of