Stress tests prove banking system 'robust', says Juncker

26th July 2010, Comments 0 comments

Results of stress tests on European banks proved the banking system was solid, Luxembourg Premier Jean-Claude Juncker, who heads the group of eurozone finance ministers, said here on Monday.

"The stress test has obviously shown that the European bank landscape is sufficiently robust," Juncker told a joint news conference with Slovenian Prime Minister Borut Pahor during an official visit to eurozone member Slovenia.

He rejected reports that the tests had not been carried out properly, saying: "as a whole, the tests were credible, done in a very professional way and people were dealing with it in an independent and rule-based way."

"I would like all the banks which have been taken under exam to publish details of the stress test concerning them, this would add to the credibility of the whole operation," he added.

The Committee of European banking supervisors published last week the results of stress tests for resistance to future financial crisis that included 91 European banks.

Seven European banks failed the EU's tests.

Slovenia's largest bank Nova Ljubljanska Banka (NLB), the only one included in the exam, just passed the tests, showing it needed to strengthen its capital base.

"We have to decide whether to increase the bank's capital with money from domestic or foreign investors," Pahor noted.

Meanwhile, Juncker commented that eurozone countries "are on the good exit way" from the crisis.

"Recovery is on the way, but I have to add that this recovery remains fragile," he said.

"Under the assumption the recovery will be strong enough, we have to withdraw the fiscal stimulus we did add to the economic circuit in recent years."

"This is not a time for increasing deficits, not a time for increasing public debt, but in all our countries, time for consolidation has come," Juncker said.

© 2010 AFP

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