EU to stress test banking system by Sept-EU sources

The European Union will stress test its banking system to determine its resilience to the economic downturn and find out if it is adequately capitalised by September, EU sources said on Tuesday.

The stress tests will be conducted by national supervisors according to common guidelines and methodology issued by the Committee of European Banking Supervisors (CEBS), the sources said.

"The decision was taken by the EU finance ministers. They decided to ask the Committee of European Banking Supervisors to organise a stress test," one source familiar with the ministers' deliberations said.

"But it is not a stress test of individual institutions like the Americans are doing. It is more a highly aggregated stress test, which should show the degree of resilience of the overall EU banking sector," the source said.

"It would show if there are additional capital requirements or if banks are adequately capitalised for the present situation," the source said.

A second source close to the EU finance ministers' deliberations confirmed the stress test of the EU banking system was to be ready by September.