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Dutch Minister Says European Stress Tests Won't Be Credible Unless Problems Found
Finance Minister Says "We're Not Doing This to Say Everything is Fine"
By David Enrich
Jan. 25, 2014 7:21 a.m. ET
DAVOS, Switzerland—Upcoming European bank stress tests will lack credibility unless some banks are found to have problems, said Dutch Finance Minister Jeroen Dijsselbloem.
"I rather hope it will unveil some unpleasantness," he said at the World Economic Forum here. "We're not doing this to say everything is fine... I hope that some bad news will come out of it. That will give me a good feeling we're doing it right this time."
The European Central Bank is conducting a two-step process, concluding later this year, that will test the health of more than 100 euro-zone banks and their ability to weather an economic storm. Banks that fail will need to come up with more capital.
UniCredit SpA Chief Executive Federico Ghizzoni, speaking on the same panel with Mr. Dijsselbloem, concurred. The testing process "will not be credible unless there is some evidence of problems," he said. "There is still a clear lack of trust... This has to be dissipated."
Multiple previous rounds of
European Union stress tests, conducted in 2010 and 2011, gave clean bills of health to most banks. Those exams were widely criticized as lacking credibility.
Write to David Enrich at
[email protected]