REHN WANTS CLARITY ON BANK STRESS TESTS, EU SPLIT
The EU Commissioner, Olli Rehn, is seeking clarity on the European bank stress tests, but the EU remains split. Mr Rehn said that “it is fully in the self interest of every bank for there to be full disclosure of the results of the stress tests, that is the best way of restoring confidence to the banking sector. He added “Of course, in parallel, member states need to have national financial backstops in place. However, I am confident that overall the European banking sector will show resilience in these stress tests”.
The stress test results are due to be published on 23rd July, but well-informed sources say that the EU nations are still split. “Several countries are strongly reluctant to publish certain ratios from the stress tests,” one EU source said. “Others, on the contrary, want full transparency.” There are 91 European banks to be investigated, including 5 Italian ones. French Economy Minister Christine Lagarde said that “discussions will continue until the last minute”. She believes that any information for publication will only be decided upon during a teleconference to be held on 22nd July. Sources say that the French are not convinced about the need to broadcast banks’ exposure to sovereign debt in the EU countries, while the UK and Spain are seeking full transparency.