Frankfurt: European policymakers said the results of bank stress tests highlight the strength of their financial systems and rejected criticism the probes were too soft as 92 per cent of the lenders passed.
"The French banking system once again shows its capacity to resist crises," Bank of France Governor Christian Noyer said on Friday after the four largest French banks were ruled to have enough capital to outlast an economic slump and sovereign debt crisis.
In Germany, where Hypo Real Estate Holding was the only one of 14 banks to fail, the Bundesbank and regulator BaFin said the "banking system has shown itself to be robust and proved its resilience". Finance chiefs carried out health checks of 91 banks in a bid to reassure investors about the state of financial institutions after the public-debt crisis pummeled the bonds of Greece, Spain and Portugal.
Insufficient reserves
The seven banks said to have insufficient reserves faced a combined capital shortfall of 3.4 billion euros (Dh16 billion), raising concern the evaluations weren't strict enough. The European Central Bank said banks that failed need to raise fresh capital or resort to government aid.
It said the study "represents an important step forward in supporting the stability of the EU and Euro-area banking sectors".
