ECB bank review will need large capital demand to be credible

The European Central Bank's landmark review of euro-zone banks will have to ask lenders to raise an additional 51 billion euros to be credible with markets, a Goldman Sachs survey of large institutional investors has found. The survey of 125 institutional investors from across the globe also found that nine of the 130 banks being tested were expected to fail, with capital shortfalls most likely at Italian, German and Austrian banks, according to a document circulated by Goldman Sachs on Tuesday night.  The ECB is examining whether banks have properly recognized losses in a bid to finally draw a line under doubts about euro zone banks' balance sheets before it becomes their supervisor on Nov. 4. Results are expected around Oct. 17. Producing a result that is in line with market expectations is key for the ECB, since previous rounds of EU bank tests in 2010 and 2011 were roundly discredited for capital demands and failure rates that were far less than what investors deemed reasonable, according to Reuters.