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Oct 6, 2011 5:04 AM by Trovette Tottress

EU to test bank capital for deeper Greek losses

BRUSSELS (AP) - A European official says that EU finance ministers have asked the bloc's banking supervisor to draw up a report on banks' capital levels as the Greek debt crisis threatens another credit crunch.

The official said Thursday that banks' ability to survive steeper losses on Greek debt will be assessed in that report and that ministers are set to discuss the results at their next meeting in early November.

The official was speaking on condition of anonymity because of the sensitivity of the issue. German Chancellor Angela Merkel said Wednesday she was in favor of a coordinated recapitalization of European banks if that was deemed necessary. Bank stocks have come under pressure on concerns over their ability to survive a default of one or more European countries.

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