Draghi Turns Judge on Europe Banks as ECB Examines Accounts

The European Central Bank is sizing up just how tough it wants to get with the region’s lenders.

Policy makers at the Frankfurt-based ECB will this week try to agree on the ground rules of its three-pronged probe into the health of the 130 banks it will start supervising next year. The process will stress-test balance sheets for exposure to sovereign debt as well as push institutions to admit to more of their bad debt than they have before, according to three officials who spoke on condition of anonymity.