IMF urges Europe to bolster lenders

The International Monetary Fund on Friday called on Europe to strengthen banks that flunked or nearly flunked stress tests amid turmoil over the Euro zone debt crisis. The IMF "strongly advocates that the necessary measures are taken to effectively address weaknesses not only in institutions that have ‘failed' the test, but also in those that have only narrowly passed it," the Washington-based institution said in a statement. The IMF, which is partnering with the European Union in financial rescues of Greece, Ireland and Portugal, welcomed the tests of whether the banks meet the Eur-opean Banking Authority's new capital requirements. In the results announced on Friday, just eight of 91 banks failed: five Spanish banks, two Greek banks and one Austrian bank. They had a combined capital shortfall of €2.5 billion (Dh12.9 billion), the regulator said. Investors had expected between 10-15 institutions would not measure up, amid deep worries over their exposure to the Eurozone debt crisis, which has spread to Italy and Spain. "The outcome of the exercise reflects efforts made by individual institutions and national supervisory authorities to strengthen bank balance sheets, but more needs to be done," the IMF said. The IMF said it was "important" that national authorities had promptly committed to address the pockets of vulnerability detected through the stress test exercise. From / Gulf News