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Thu 9 Jul 2009 11:45 AM

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Kuwait central bank says stress tests 'inadequate'- paper

Central bank wants banks to carry out half-yearly stress tests, and inform the findings.

Kuwait's central bank has told local lenders their methods for stress tests are inadequate, and should be more stringent, a newspaper said on Thursday.

Risk management at local lenders were not qualified to perform the stress tests the central bank requested for the first quarter, local daily Al Jarida said citing an internal memo by the central bank.

Most of the lenders did not prepare plans to strengthen their capital and to deal with the causes of their losses and a decline in profitability, it added.

Banks should carry out half-yearly stress tests, and inform the central bank of the findings, the paper cited the memo as saying.

The central bank could not immediately be reached for comment.

Last month, the central bank told local lenders to carry out a third round of stress tests for their first-half financial results, banking sources said. (Reuters)

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