Brussels, 12/07/2011 (Agence Europe) - On Tuesday 12 July, EU finance ministers discussed the results of the 2011 stress tests on 91 European banks that are due to be published by the European Banking Authority (EBA) on Friday. In a statement, the ministers say that any necessary corrective measures will be taken once the results have been published in order to tackle decisively pockets of vulnerability in the European banking system. The focus will be on private sector solutions to enable the banks to raise capital themselves from the money markets. As a last resort, public bailouts of failing banks may also be considered in line with EU state aid rules.
The Polish chair of the ECOFIN Council, Jacek Rostowski, said that transparency creates trust and the stress test results will include details of banks' exposure to sovereign debt. Such information will help the markets draw their own conclusions about European banks, he added, pointing out that struggling banks would have three months in which to deal with their problems. He said the 2011 tests had already encouraged banks to seek a further €60 billion in finance since the start of the year throughout the EU. EU Internal Market Commissioner Michel Barnier said he was determined that the test results should be credible and robust, noting that the tests examined banks' ability to cope with crises that have not happened, like a 4% fall in GDP in the eurozone. The commissioner said that the 2012 tests would learn from the 2011 tests, but the banking industry wants EU bank stress tests to be dropped because they weaken EU banks' competitiveness against US banks (whose stress tests are less stringent). EU Economic and Monetary Affairs Commissioner Olli Rehn said it was not possible to provide a solution to the sovereign debt crisis without examining vulnerability in the bank sector. (M.B./transl.fl)