<TABLE border=0 cellSpacing=0 cellPadding=0 width="100%"><TBODY><TR>EU to 'carry out stress tests on big banks'
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<!-- START OF : div id="storytext"--><!-- more than 4 paragraphs -->BRUSSELS: - European Union (EU) countries are to carry out so-called 'stress tests' on some of their biggest banks over the coming months to determine how solid they are, officials said yesterday.
Washington last week published the results of stress tests of the shell-shocked United States banking sector, which showed that 10 big American banks needed a total of US$75 billion (S$109 billion) in extra capital.
EU finance ministers agreed in principle to tests at a meeting in Brussels last week, and officials are hammering out the details with the aim of presenting ministers with the results in September, officials said.
'It's not about looking into specifics or defining further needs of capital for specific banks, but rather it's about finding out if there is something we should worry about,' one EU official said on condition of anonymity.
'Now is the time for regulators to work and the report will be presented in September,' the official added.
'The idea is to have a sample of systemic, representative banks, but not all of the banks,' another EU official said, also on condition of anonymity.
Although the financial crisis is rooted in the US housing market, European banks have suffered in the turmoil, especially since many had liabilities supported by less capital than some of their US counterparts.
As a result, many European countries rushed to bail out banks and guarantee their lending between them in the midst of a crisis of confidence in the sector last year.
In Paris, International Monetary Fund Europe director Marek Belka urged European governments to carry out stress tests on banks. 'They need to subject financial institutions to rigorous stress tests and force them to recognise losses and recapitalise or resolve them where needed.' AGENCE FRANCE-PRESSE
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<!-- START OF : div id="storytext"--><!-- more than 4 paragraphs -->BRUSSELS: - European Union (EU) countries are to carry out so-called 'stress tests' on some of their biggest banks over the coming months to determine how solid they are, officials said yesterday.
Washington last week published the results of stress tests of the shell-shocked United States banking sector, which showed that 10 big American banks needed a total of US$75 billion (S$109 billion) in extra capital.
EU finance ministers agreed in principle to tests at a meeting in Brussels last week, and officials are hammering out the details with the aim of presenting ministers with the results in September, officials said.
'It's not about looking into specifics or defining further needs of capital for specific banks, but rather it's about finding out if there is something we should worry about,' one EU official said on condition of anonymity.
'Now is the time for regulators to work and the report will be presented in September,' the official added.
'The idea is to have a sample of systemic, representative banks, but not all of the banks,' another EU official said, also on condition of anonymity.
Although the financial crisis is rooted in the US housing market, European banks have suffered in the turmoil, especially since many had liabilities supported by less capital than some of their US counterparts.
As a result, many European countries rushed to bail out banks and guarantee their lending between them in the midst of a crisis of confidence in the sector last year.
In Paris, International Monetary Fund Europe director Marek Belka urged European governments to carry out stress tests on banks. 'They need to subject financial institutions to rigorous stress tests and force them to recognise losses and recapitalise or resolve them where needed.' AGENCE FRANCE-PRESSE
