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EU to reveal bank stress tests

EU LEADERS have agreed to publish detailed results of stress tests as it was revealed that Ireland is looking to extend its bank guarantee scheme.

The publication of the so-called stress tests on the health of 25 big European banks is to outline to investors the key areas of potential risk.

Regulators across Europe have been conducting the tests to see how well the region's banks will hold up to any further massive deterioration in financial and economic conditions.

The tests are tools used by regulators to determine how well banks and their assets will hold up under a variety of different economic financial scenarios, such as a sharp rise in unemployment or a sudden refusal of banks to lend.

The results of a test might indicate, for example, that a bank needs to raise more capital.

The leaders also agreed that national governments should tax their banks and use the money in part to fund the resolution of ailing banks if necessary. The EU will push that position at a meeting of the Group of 20 industrial and developing countries in Toronto later this month, where they are likely to face opposition from Canada and some other governments.

EU leaders also supported a general levy on European banks to ensure they contributed to the cost of funding future crises.

And Taoiseach Brian Cowen said that he saw the move as a "strengthening" of the budget process.