Work-related stress

26 May 2010 By Peter Thal Larsen Follow @Peter_TL

The U.S. Treasury boss plans to urge a generalised EU stresstest. That could help ease the current crisis, if governments could credibly promise to close any capital gaps. Arranging tests is tricky, but they are more urgently needed than bank taxes, the EU’s current obsession.

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U.S. Treasury Secretary Timothy Geithner flew to Europe on May 26 to press for united action to tackle the euro zone's deepening debt crisis.

Geithner, in London after a trip to China, will "discuss the economic situation in the region and the measures being taken to restore global confidence and financial stability and to promote continued recovery," the U.S. Treasury said in a statement.

He will also urge European officials to conduct bank stress tests similar to those carried out by the U.S. last year, CNBC reported, citing senior administration sources.

Any stress tests, however, would have to differ from those conducted by U.S. regulators in the spring of 2009, because Europe lacks a huge bailout fund like the $700 billion Troubled Asset Relief Program to plug any capital deficiencies found, CNBC said.

Michel Barnier, the EU's internal market commissioner, was due on May 26 to outline proposals for European countries to introduce a bank levy on banks. The proceeds of the levy would contribute to funds that could be used to help wind down big banks in future.

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