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ECB's Nowotny urges coordination of bank stress tests, quality checks

VIENNA (Reuters) - European officials will discuss on Thursday how to sequence health checks for bank balance sheets and stress tests for lenders, ECB policymaker Ewald Nowotny said on Tuesday, calling for a coordinated approach.

The touchy issue - which has to be settled before the European Central Bank takes on a bank supervision role in the euro zone next year - will be a topic for the European Systemic Risk Board (ESRB), Nowotny told a financial conference.

"What we have to prevent at all costs is getting the results of the (banks') capital need from the asset quality review, and then the outcome of a stress test," he said.

"No one will understand that. That will lead, instead of calming the markets, to completely confusing the markets."

(Reporting by Michael Shields; Editing by Ruth Pitchford)