Schaeuble expects EU to boost big banks' capital

17th October 2011, Comments 0 comments

German Finance Minister Wolfgang Schaeuble said Monday he expects EU regulators to reach a decision to ensure the bloc's biggest banks have sufficient capital to deal with the sovereign debt crisis.

Schaeuble told a forum in central London that recapitalisation was among the "bold steps" needed to tackle the crisis.

"We need for systemic banks all over Europe to have enough capital, I think we'll get a decision from the European authority," he said.

Schaeuble said he also expected an agreement over more flexibility in the use of the EU's emergency bailout fund, the European Financial Stability Facility (EFSF).

"Secondly, we have to use the enhanced EFSF in a flexible way, in a most efficient way. I think we will get that," he told a packed audience at the Chatham House think tank.

With a key EU summit looming on Sunday, Schaeuble highlighted the need for a "sustainable" solution for debt-ridden Greece and for some member states to announce plans for debt restructuring.

Earlier, the veteran minister had sought to dampen expectations for the summit in Brussels.

Speaking in Germany, he warned that the decisions taken would be part of "important measures to be taken over the long term, and this long term is likely to last into next year."

German government spokesman Stefan Seibert went further, saying "dreams that everything will be resolved and dealt with by next Monday cannot be fulfilled."

© 2011 AFP

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