EU Finance Ministers on Saturday agreed on the importance of joint action to boost the European bank sector. “We reached the conclusion that we need to make our financial system more robust,” Spanish Economy Minister Elena Salgado told reporters following the EU finance ministers meeting held in Wroclaw, in the southwest of Poland. “There is a consensus that it would be good for our financial institutions to strengthen their capital to comply with Basel III requirements and to face any eventuality of the moment,” she said The meeting discussed ways to restore confidence in European markets and improve financial stability in addition to the stress tests, which were carried out earlier this year on European banks. “There is a consensus that it would be good for our financial institutions to strengthen their capital to comply with Basel III requirements and to face any eventuality of the moment,” she said. BASEL III is a new global regulatory standard on bank capital adequacy and liquidity agreed by the members of the Basel Committee on Banking Supervision (BCBS). It was developed in a response to the deficiencies in financial regulation revealed by the global financial crisis. It strengthens bank capital requirements and introduces new regulatory requirements on bank liquidity and bank leverage. The EU Finance Ministers also recognized the need to make the stress tests “more uniform and…more rigorous,” said Salgado. The European Union is looking at a range of options for making its bank stress tests more credible, including tougher scrutiny of banks’ sovereign debt holdings, after the tests published in July did little to ease market concerns about the region’s banks, an EU official said earlier Saturday. The July stress tests found that European banks are largely well-capitalized. But the tests didn’t take full account of what would happen to bank capital if a euro-zone government goes through a major default. That has become a more pressing concern as Greece’s budget reforms haven’t worked as expected; meanwhile, yields on Italian and Spanish debt spiked in August to their highest levels since the introduction of the euro, according to the Wall Street journal. Among the options, governments are considering whether the consequences of a sovereign default should be modeled more explicitly. “That could be achieved either by modeling bigger losses on sovereign debt held in the banks’ trading books or by including debt that is in the banking book — or “held to maturity” — in the tests, WSJ quoted the official as saying.