Santander bank chief slams EU crisis plan

18th October 2011, Comments 0 comments

The chairman of major Spanish bank Santander Tuesday rejected emergency plans to make European lenders bolster their capital, saying it would worsen market panic and curb lending.

"These proposals make no sense," Emilio Botin, chairman of Santander, Europe's biggest bank by capitalisation, told a bankers' conference in Madrid.

"They create insecurity and confusion" and "increase uncertainty in the markets," he warned, adding that forcing banks to recapitalise would prompt many to cut back lending.

EU leaders at a summit on Sunday are expected to agree to force banks to recapitilise as part of a plan to end the growing debt crisis which is undermining the stability of the euro.

"Casting general doubt on the sustainability of public debt or the European financial system could send us into an unstoppable spiral of banking and sovereign crises," Botin said.

"An indiscriminate recapitalisation must not be enforced without definitively solving the public debt problem."

© 2011 AFP

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