FRANKFURT, Feb 24: The European banking system is well positioned to withstand an European economic slowdown as well as any shock from a possible war with Iraq, despite recent big bank losses, the European Central Bank said on Monday.

Banks also are extending loans to creditworthy customers, demonstrating there is not a credit crunch, and they have stable capital ratios, central bank officials said in releasing the ECB report on EU banking stability.

“European banks will continue to have a notable capacity to withstand any shocks,” Edgar Meister, who sits on the Bundesbank and heads the European Banking Supervision Committee, said at a news conference.—Reuters