FRANKFURT (MNI) – Weak European banks would be recapitalized,
should weaknesses emerge as a result of stress tests to be carried out
across the continent, European Economic and Monetary Affairs
Commissioner Olli Rehn said in an interview with Reuters on Thursday.
China’s recent declaration that it would make the yuan’s exchange
rate more flexible is positive, but it must be implemented properly to
be effective in easing global imbalances, Rehn said in the interview.
“My view is that the European banking sector is stronger and more
resilient overall than [the] perception for the moment is,” he said.
But should “pockets of vulnerability” emerge from the stress tests,
then the weak banks would be recapitalized, he assured.
Rehn approved of China’s currency move but said, “the proof of the
pudding is in the eating. And it will depend on the practical
implementation of this decision returning to a flexible exchange rate,”
he said.
“I think the Chinese authorities are aware of the needs of the
Chinese economy which to my mind coincides with the needs of the world
economy,” he added.
–Frankfurt bureau; +49-69720142; frankfurt@marketnews.com
[TOPICS: MT$$$$,MFX$$$,MFXBO$,MGX$$$,M$X$$$,M$$EC$]
