Press Release No. 11/282

Press Release: Statement by the IMF on the European Banks Stress Test

July 15, 2011

Mr. José Viñals, financial counselor and director of the Monetary and Capital Markets Department of the International Monetary Fund (IMF), issued the following statement today:

“The Fund welcomes the EU-wide stress test exercise carried out under the auspices of the European Bank Authority (EBA) and the strengthened methodology and assumptions that have been applied across the banks in the exercise.

“The disclosure of the very detailed information accompanying the release of the stress test results will allow market participants to form a considered view of the soundness of the banks participating in the test. We hope that this elevated degree of transparency becomes a permanent feature at the level of national jurisdictions.

“The outcome of the exercise reflects efforts made by individual institutions and national supervisory authorities to strengthen bank balance sheets, but more needs to be done. The Fund considers it important that national authorities have promptly committed to address the pockets of vulnerability detected through the stress test exercise, and strongly advocates that the necessary measures are taken to effectively address weaknesses not only in institutions that have ‘failed’ the test, but also in those that have only narrowly passed it. More generally, in light of the current turmoil, the Fund would emphasize the importance of further strengthening capital buffers.”