EU’s Juncker rejects criticism of bank stress tests

LJUBLJANA (BestGrowthStock) – The Eurogroup chairman Jean-Claude Juncker said on Monday EU bank stress tests were done “in a very professional way”, rejecting criticism that they had not been harsh enough.

Juncker also told reporters that economic recovery in the euro zone remained fragile, with possible downside risks, and that the time has come for monetary consolidation and structural reforms.

“The stress tests have obviously shown that the banking landscape is sufficiently robust,” Juncker told a news conference during a one-day visit to Ljubljana.

Just seven of 91 banks in 20 EU countries failed the tests, including six in Spain and Greece, for an overall capital shortfall of 3.5 billion euros.

But the unprecedented health check of European banks was quickly criticized as being too soft.

Juncker urged all 91 banks included in the test to publish details of their results as “this would add to credibility of their operation”.

He said recovery in the euro zone was under way but added: “This recovery remains fragile, there are remaining downward risks that we have to take into consideration.”

He said euro zone fundamentals were better than those in the United States or Japan, and euro zone exit strategy had to be combined with structural reforms, which he said were a necessity rather than an option.

“In all our (euro group) countries… time for (monetary) consolidation has come.”

He declined to comment on the recent euro rebound.

“Don’t pay too high attention to the volatility of the exchange rate because the volatility is in fact a phenomenon we should try to avoid, what is important are the economic fundamentals,” Juncker said.

Eurogroup comprises all euro zone finance ministers.

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(Reporting by Marja Novak; Editing by Zoran Radosavljevic and Ron Askew)

EU’s Juncker rejects criticism of bank stress tests