EU vows transparency in bank stress tests
Thursday, 15 July 2010
BRUSSELS, July 14 (AFP): EU finance ministers scrambled yesterday to ease market concerns over the health of European banks, vowing that results of tests on their ability to survive a new economic crisis would be transparent.
European officials hope results of tests on 91 banks accounting for 65 per cent of the European banking system will reassure investors worried that some lenders may have hidden the extent of their exposure to bad debt.
Belgian Finance Minister Didier Reynders, whose country holds the rotating EU presidency, said his counterparts had agreed at a meeting in Brussels to coordinate the July 23 release of the test results.
"The desire is to do it in the most transparent way as possible, including by presenting the exposure of different institutions to sovereign debt," he told a news conference.
"The objective is to have a presentation (of test results) that gives the greatest guarantees of credibility to the institutions," he said.
British finance minister George Osborne said it was also crucial for EU states to have "credible plans" ready to assist banks in case some of them fail the tests and need fresh funds to bolster their balance sheets.
"I'm not suggesting that any institutions will necessarily
look vulnerable but if any do, then we need to be able to stand by them," Osborne said.
The health of the European banking sector has come under sharp focus from investors worried that they might have been hit hard by Europe's sovereign debt crisis.
European officials hope results of tests on 91 banks accounting for 65 per cent of the European banking system will reassure investors worried that some lenders may have hidden the extent of their exposure to bad debt.
Belgian Finance Minister Didier Reynders, whose country holds the rotating EU presidency, said his counterparts had agreed at a meeting in Brussels to coordinate the July 23 release of the test results.
"The desire is to do it in the most transparent way as possible, including by presenting the exposure of different institutions to sovereign debt," he told a news conference.
"The objective is to have a presentation (of test results) that gives the greatest guarantees of credibility to the institutions," he said.
British finance minister George Osborne said it was also crucial for EU states to have "credible plans" ready to assist banks in case some of them fail the tests and need fresh funds to bolster their balance sheets.
"I'm not suggesting that any institutions will necessarily
look vulnerable but if any do, then we need to be able to stand by them," Osborne said.
The health of the European banking sector has come under sharp focus from investors worried that they might have been hit hard by Europe's sovereign debt crisis.