Details of Europe-wide testing of banks' financial vulnerabilities are still being worked out as an end-of-July deadline to publish the stress test results for individual banks looms, the Bundesbank said on Thursday.

Bundesbank Vice President Franz-Christoph Zeitler said regulators were pushing ahead with plans for the tests, even as a newspaper reported that the German central bank and the country's lenders opposed full disclosure of the results.

Banking supervisors have been conducting so-called stress tests to see how lenders would be affected by a sharp downturn in the economy or other shocks. Some banks fear a backlash if published results don't match financial market expectations.

That concern was underscored on Thursday by a Financial Times report quoting an unnamed senior banker as saying the tests may force two to four German banks to seek help from the country's bank rescue fund, Soffin.

Soffin has pumped billions into the country's second-biggest lender Commerzbank (CBKG.DE), and even took over property lender Hypo Real Estate in the crisis.

Germany's Finance Ministry and Soffin declined to comment.

Zeitler side-stepped questions on the need for aid and the degree to which the Bundesbank may back banks' desire to control which results would be published.

At the moment, there is no reason to make further statements related to individual institutions, he said.

A European Central Bank tender on Thursday eased some of the fears about euro zone banks that have unnerved financial markets in recent months, suggesting they can cope with the repayment of almost half a trillion in emergency loans


In the United States, regulators have told top banks to raise $74.6 billion to build a capital cushion officials hope will restore faith in financial firms and set a course out of the deepest recession in decades.

Germany's biggest lender, Deutsche Bank (DBKGn.DE), came through the financial crisis without having to ask for government aid but several of the eight state-backed landesbank lenders had to turn to their owners for extra backing after writing billions of euros off the value of their investments.

The European Union has demanded landesbanks undertake sweeping restructuring, including changing ownership and slashing balance sheets, in exchange for allowing aid from the banks' owners, usually local states and savings banks.

The stress tests are also due to look at banks' holding of volatile government debt. Sources familiar with the situation have told Reuters they may include more than 100 banks, 15 of them in Germany. Zeitler said details had yet to be determined.

The decision of (EU) heads of state and government is that the stress tests should be published in the second half of July after CEBS' evaluation, but the publication must take place according to (German) law and that means with the permission of the banks, he said, adding that he put particular importance on banks' agreeing to publication.

I can't say anything more about the content of the stress tests because the scenario had not yet been agreed.

Up to now, regulators have conducted tests on around 25 large European banks.

Sources familiar with the matter told Reuters this week that the first three to be tested in Germany -- Deutsche Bank, Commerzbank and landesbank BayernLB [BAYLB.UL]

Zeitler said the financial market situation remained fragile, as witnessed by spreads on government bonds and other securities, though Germany's money market has barely been hit.

Talk of a credit crunch had calmed down, but the Bundesbank would continue to monitor the situation closely, he said, adding that the situation involving potential credit defaults had improved in many cases. (Additional reporting by Arno Schuetze)