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EU reveals bank backup plan

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EU reveals bank backup plan
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The EU’s Economy Commissioner is trying to reassure investors about support for Europe’s banks.

Olli Rehn said countries that find problems when they apply stress-tests to their lenders could turn to the 500 billion euro scheme set up as a safety net in case borrowing problems in Greece spread to Spain and beyond.

That would only be necessary if a government exhausted national funds in helping a troubled bank.

On Tuesday, Bank of France head and European Central Bank Governing Council member Christian Noyer said French banks are likely to pass Europe-wide stress tests.

That helped relieve concerns about the health of the sector ahead of the tests later this month.

Noyer’s comments followed similar remarks from French Economy Minister Christine Lagarde.

Quoting sources, Reuters has reported that European Central Bank President Jean-Claude Trichet will meet Europe’s top banks to discuss the tests before the results are published.