'No surprises' in eurozone stress tests: ECB official

21st June 2010, Comments 0 comments

There will be "no surprises" in the results of stress tests on the ability of eurozone banks to sustain sudden financial shocks, a senior official of the European Central Bank said Monday.

"Every country has strengths and weaknesses, but I don't expect any surprises from the publication of stress tests," ECB executive council member Jose Manuel Gonzalez-Paramo told reporters in Spain.

EU leaders agreed at a summit on Thursday to release the results of the stress tests in order to calm markets nervous over the health of the financial institutions.

Gonzalez-Paramo also said that current eurozone interest rates are "appropriate for the current situation" and for the balance of risks to price stability.

The ECB official also expressed confidence that Spain's bank restructuring fund, also known as FROB, "has more than enough" money to help embattled Spanish savings banks go through a dramatic consolidation process.

Spain's regional savings banks have requested around 11 billion euros from the fund to carry out their merger plans, the Bank of Spain said last week.

Many of the savings banks have been badly exposed to bad debt following the collapse of the property sector at the end of 2008, and the government has encouraged their consolidation in order to maintain liquidity.

-- With Dow Jones Newswires --

© 2010 AFP

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