Banking 'stress tests' defended

The US government’s unprecedented “stress tests” of the country’s 19 largest banks should bolster Americans’ battered confidence in the banking system, Federal Reserve chairman Ben Bernanke said.

The much-anticipated results released last Thursday showed that 10 banks - including Bank of America, Wells Fargo and Citigroup – must raise a total of £50bn (€36.5bn) in new capital to absorb potential losses if the recession were to take a turn for the worst.