Results of the stress tests imposed on European Union banks should be completely transparent to help boost confidence in the bloc's economy, the EU's monetary affairs chief said on Monday.
EU government leaders said last month they would disclose the results of stress tests on the region's banks but left many questions unanswered as to how testing would work.
The results, which policymakers hope will reassure investors that EU banks are sound and boost fragile market confidence in the EU economy, are to be released around July 23.
With financial markers unsure what exactly will be published, EU Monetary Commissioner Olli Rehn said the results should be fully transparent.
The (European) Commission is in favor of full transparency and advocated the extension of bank stress tests and the publication of the results by the end of July, Rehn told European parliamentarians.
This will help reduce uncertainty and restore confidence. The doubts about the health of the European banks need to be dispelled, which is why the stress tests are so important.
Details of what will be published is expected to be finalized on July 12-13 when euro zone and EU finance ministers meet in Brussels.
Some investors are concerned that the tests will be fudged or the complete results not published.
Partly as a result of this uncertainly, European bank shares were among the top losers on markets on Monday, with Barclays , Lloyds , Royal Bank of Scotland and Credit Agricole down.
French Economy Minister Christine Lagarde has said the stress-test results will show that banks in Europe are solid.
But German magazine Der Spiegel reported on Saturday that European regulators were opposed to including a sovereign default scenario in the tests.
Rehn also said that fears about a double-dip recession in the euro zone and elsewhere were exaggerated.
The underlying basic trend in the real economy is clearly upwards, he said.
He repeated that euro zone countries needed austerity measures to regain credibility with investors, despite fears of some economists and politicians that this would stifle recovery from the worst economic crisis in decades.
Rehn added that the euro zone should promptly launch its emergency aid mechanism, worth 440 billion euros ($590 billion), due to be set up to prevent the debt crisis from spreading from Greece to other euro zone countries.
Slovakia's balking at signing off a framework needed to launch the fund, following national elections in the euro zone's new member state, are partly responsible for the delay.
In my view, our immediate priority should be to make the newly established and temporary European Financial Stability Facility operational, Rehn said.
(Writing by Marcin Grajewski)