EU's Barnier wants regular bank stress tests-paper

FRANKFURT, Sept 8 (Reuters) - Europe ought to regularly test its banks' ability to withstand the kind of shocks that provoked the financial crisis, the European Union's financial markets chief, Michel Barnier, said in a newspaper interview.

European regulators conducted stress tests on 91 banks in July that were designed to restore confidence in the region's banking sector, but many investors remained sceptical of the test's credibility and banks are loath to repeat the exercise.

"In any case, I am of the opinion that we will have to regularly conduct stress tests in the future," Barnier told Germany's Handelsblatt newspaper.

The EU Internal Market Commissioner also said he expected the United States to begin applying by the middle of next year at the latest important parts of the new Basel rules governing the capital banks must set aside to cover risky assets.

Financial regulators on Tuesday reached a compromise on the new rules which will go to senior central bank and supervisory officials for endorsement on Sunday. [ID:nLDE6861DD]

Barnier said European banks were not left at a competitive disadvantage versus the United States by the wave of regulation.

"In the regulation of derivatives and short selling they were even faster than we were," Barnier said.

For an overview of regulation stories see [ID:nLDE64915B]

(Reporting by Jonathan Gould; Editing by David Cowell)