Jim O'Neill, chief economist Goldman Sachs, says that the stress tests carried out on EU banks represents a "credible process".

Interviewed by Today presenter Evan Davis, Mr O'Neill said that the same process, carried out in the United States was seen as "one of the key things to help bring around a recovery".

He added that a poll of 376 Goldman Sachs clients had revealed that they expect "9 or 10" of the EU banks to fail the tests.

But Sir Howard Davies, director of the London School of Economics, and a former head of the Financial Services Authority, told the programme that there was "no way stress tests can solve the problem" of failing banks.

And he added that governments would have to intervene to provide extra liquidity for failing banks, as there was "no free market capital available" to help them stay afloat.

The results of the stress tests will be published at 5pm UK-time today.

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