BRUSSELS (AP) -- European finance ministers are holding difficult talks on how to shore up their banking system and prevent further financial crises.
Officials from the 28 member countries are meeting Friday to narrow their differences on how to set up a new agency at the European Union level that could restructure failing banks and prevent their troubles from bankrupting individual countries through expensive bailouts.
Officials said no deal was expected — but they hope to make progress so one can be achieved by a year-end deadline, so that the new agency can be passed into law before the current EU parliament's term runs out in May.
European Central Bank officials are also pressing the ministers to issue a clear statement on their willingness to come up with government money if an ECB review and stress tests uncover banks that are so weak that they need more capital and can't raise it elsewhere.
Top ECB official Joerg Asmussen said on his way into the Brussels meeting that without financial backstops, the review of bank finances "is not credible."
The exercise is intended to ferret out hidden losses and lead to a stronger banking system that can lend more readily to businesses and support economic growth. But it could lead to banks being told to raise more financial buffers against losses. That could shake confidence in the financial system if there's no way for them to find the money they need.
He urged the ministers to express "the will, if needed to deploy this kind of backstop. "
So far, ministers have said banks must first find money from private investors, and from national governments only if they can't find it that way. Governments that can't afford the bailout could turn to the eurozone bailout fund if they meet its strict conditions.
With the ECB review, the EU is trying to improve on two earlier reviews of bank financing under another agency, the European Banking Authority, in 2009 and 2011. Those reviews, or stress tests, lost credibility after some banks that had been given the all-clear later needed bailouts.
Fixing banks is seen as key to solving the debt problems afflicting the euro currency union and shoring up economic growth.
EU officials on Thursday celebrated decisions by Ireland and Spain to end bailout support from other countries. But growth remains sluggish and debt levels high in several countries. Greece, Portugal and Cyprus are still getting financial support.