Brussels seeks to ease fears over stress tests for banks as nervousness grows

The European banking system is overall strong and resilient and systems are in place to deal swiftly with any vulnerabilities revealed by stress tests, the European commissioner for economic and monetary affairs said Tuesday. “We are confident that overall the European banking system is strong and resilient. Nevertheless, in case any elements of vulnerability are identified, systems are in place to deal with them swiftly and properly,” Rehn said after a meeting of European Union finance ministers in Brussels, according to Dow Jones News service. Rehn said it would be best for banks to raise capital from markets or shareholders if the stress tests show weakness. Economic and Financial ministers met in Brussels for the Ecofin Council to examine the economic situation and review the stress tests carried out by the European supervisory authorities in the banking sector, which will be made public in the second half of July. Ministers also were due to open excessive-deficit procedures for Bulgaria, Cyprus, Denmark and Finland, and evaluate the measures taken by 13 other Member States to correct their excessive deficits. They was also due to authorise Estonia to adopt the euro as its currency as from 1 January 2011, and for that purpose set a permanent conversion rate for the Estonian crown against the euro. The Belgian Presidency will present its work programme on economic and financial matters, and the Council will review the follow-up to the June European Council …