July 15, 2010 / 11:11 AM / 10 years ago

Osborne says banks won't need aid after stress test

Chancellor George Osborne speaks at the Lord Mayor's dinner to the Bankers and Merchants of the City of London at Mansion House in London June 16, 2010. REUTERS/Suzanne Plunkett

LONDON (Reuters) - British banks will not need government help to shore up their financial position after the publication of European Union ‘stress tests’ on July 23, Chancellor George Osborne said on Thursday.

“There’s a plan to stand behind any banks that don’t meet them. Although I should say we’re not expecting that to be the case in the UK,” Osborne told legislators at his first hearing before parliament’s finance committee.

Italian central bank governor Mario Draghi made a similar comment about his country’s banks earlier on Thursday.

The stress tests are designed to check whether banks have sufficient funds in reserve to cope with various potential future financial crises.

Reporting by David Milliken and Fiona Shaikh

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