Italian banking official: Stress test restores credibility

MILAN – The head of the Italian Banking Association says that the European stress test has restored credibility to the nation's banking sector.

Four out of the five Italian banks subjected to the test of financial health showed capital levels that could weather adverse economic conditions. However, Monte dei Paschi di Siena fared worst among the 51 European banks tested, according to results released Friday.

Italian Banking Association President Antonio Patuelli said Saturday that "the credibility of Italian banks has been reinforced," but he called for continued reforms in the sector.

Monte Paschi sought to get ahead of the poor result with the announcement of a 5 billion euro ($5.6 billion) capital increase, its third in two years. The plan calls for raising the funds privately without state aid.