The results of stress tests of 19 leading US banks due later on Thursday are expected to show more than half in need of dozens of billions of dollars in extra capital.

But bank shares soared on Wall Street and the momentum carried over to Asian trade as investors welcomed more clarity on the health of the sector at the heart of a financial crisis that drove the world economy into its worst recession in six decades.

Markets also found comfort in news of slowing US job losses and an improving outlook for Europe's dominant service sector and hope to hear a similarly assuring message from the European Central Bank when it meets later on Thursday.

The ECB is seen nearly certain to shave another quarter point off its benchmark rate to a new record low of 1.0 per cent and the market focus now is on whether it will announce any unconventional steps to get the euro zone economy back on its feet.

Mr Geithner, speaking ahead of the release of the results of bank stress tests at 2100 GMT (5am Singapore time), assured the US public that the vast majority of the screened banks would be able to raise capital on their own and none faced a threat of collapse.

'None of those 19 banks are at risk for insolvency,' he said, according to a transcript of a television interview.

Mr Geithner also said the pace of the US economic decline was slowing, even as the economy still faced enormous uncertainty.

'The pace of decline is slowing, here and around the world. And there are some places where we're seeing things starting to improve, but the main thing is a sense of stability,' he said.

The world's biggest economy is now forecast to start recovering from its worst recession in a generation in the second half of the year, though San Francisco Fed president Janet Yellen warned the recovery may be 'frustratingly tepid'. -- REUTERS