IMF's Lagarde: Uncertainty over health of European banks

International Monetary Fund Managing Director Christine Lagarde said Thursday that questions marks remain over the health of Europe's banks and that coming stress tests are a chance to build confidence in them.

In an article published online by Project Syndicate, Lagarde said Europe is "at a key juncture", showing signs of recovery but stuck with "uneven and unbalanced" growth.

"While many countries are doing well, demand in general remains weak, and unemployment in the periphery remains obstinately high, particularly for young people."

"One area of uncertainty for Europe is the health of its banks," she said.

"The forthcoming stress tests and asset-quality review can help restore confidence and advance financial integration, but only if they are conducted well."

The European Central Bank has said it will conduct stress tests on the banks sometime this year, to see if they have rebuilt their capital enough to withstand new crises.

Lagarde also called on the region to boost demand and advance reforms that will help generate jobs.