EU fund ‘may be used to capitalise banks’

NATIONAL governments could tap part of the EU’s bailout fund to recapitalise banks following the stress tests if they fail to raise the money on the markets, Commission sources have suggested.

The Department of Finance has said it does not believe it will be needed in Ireland as Irish banks have been thoroughly tested. Bank of Ireland has already raised the additional capital it was deemed to need and AIB is in the process of doing so.

Major banks in all member states are being stress tested. The results will be published to reduce uncertainty about their health.