European banks are in better shape than markets think, the head of Europe’s new banking watchdog has said.

The Single Supervisory Mechanism (SSM), which Daniele Nouy leads, is part of the ECB. It is poring through bank books before it takes over supervising the bloc's banks in November.

“I think that banks in Europe are in a better condition than markets estimate,” Mr Nouy told Finnish business daily Kauppalehti.

“Banks have done a lot to get their things in order.”

The European Central Bank plans to charge lenders as much as €15 million a year in supervisory fees.

The largest institutions will be hit with annual levies of this size, according to draft proposals from the central bank.

Reuters