EU officials 'looking to impose bank capital rules'

2 May 2012

Policymakers from the European Union (EU) are today (2 May) expected to request that banks across the continent hold more capital in the near future.

Analysts believe that EU member states such as UK and Sweden will press for changes to regulations that would mean financiers would have to retain healthier balance sheets.

Officials are of the opinion that this would minimise the possibility of banks having to rely on taxpayer funds to bail them out should a repeat of the global financial crisis occur.

For instance, one EU diplomat was quoted by the New York Times as saying many policymakers are concerned about the current system, in which banks "may be international in life, but national in debt".

Recently, fears have increased that Spain's banking may require an international rescue in the near future after leading credit ratings agency Standard & Poor's downgraded 11 of the country's foremost lenders.

By Tony Aynsley

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