Stress tests on 22 banks in the crisis-hit EU have shown the lenders are 'sufficiently capitalised,' the bloc's Swedish presidency said this evening.
'The credit losses have been calculated at €400 billion for 2009 and 2010', said Swedish finance minister Anders Borg.
'Even in that adverse scenario, none of the banks would fall down on their tier one capital requirements,' he said, adding that the results were 'reassuring'.
The dollar loss projections for the 22 European banks - representing over 60% of all banking assets held within the EU - amount to $580 billion.
European banks' stress test exposure has been the subject of transatlantic debate with different accounting methods obtaining different results.
'It was very harsh as regards the assumptions we used,' insisted European Central Bank governor Jean-Claude Trichet of scenarios forecasting a decrease in European Union GDP of 5.2% for 2009 and a 2.7% drop in 2010.
The Organisation for Economic Co-operation and Development said last month that International Monetary Fund figures have put potential write-downs for continental European banks at up to $1.1 trillion.
European Economic and monetary affairs commissioner Joaquin Almunia said the estimates given to European Union finance ministers meeting in Sweden were 'based on a different geographical dimension' from the IMF report, saying the latter 'included banks established in countries not in the EU.'
French finance minister Christine Lagarde said that the entire European financial system would show up in a 'very strong' light.
