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Berlin welcomes ECB bank tests, warns ESM no backstop
October 23, 2013 / 8:45 AM / 4 years ago

Berlin welcomes ECB bank tests, warns ESM no backstop

BERLIN, Oct 23 (Reuters) - Germany’s Finance Ministry welcomed the European Central Bank’s plans to submit the euro zone’s top banks to comprehensive tests next year, warning lenders to use the time ahead of the probe to get in good shape and shore up capital if needed.

The ministry added banks themselves would have to fill any shortfalls revealed by the tests, and state help would only be available if all market options were exhausted. The euro zone’s European Stability Mechanism (ESM) rescue fund would not be a new backstop, it added.

“This can only be used if a country itself is incapable of recapitalising its banks. Then the country can apply for help from the ESM,” the ministry said. (Reporting by Matthias Sobolewski)

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