EU struggles to seek accord on bank capital

European Union finance ministers struggled yesterday to reach a deal on forcing banks to set aside more capital to cushion future losses, with Spain saying the bloc had to dispel doubts about the strength of its lenders.

The EU’s 27 members are divided over how much capital banks should hold in future to protect themselves against the kind of losses which have brought down dozens of lenders in Europe and the US, often requiring bailouts funded by taxpayers.

Spain, whose banks have suffered huge losses inflicted by a property crash that is continuing unabated, said new rules were vital for handling future turmoil.

“At this time of financial crisis, we need to clear up all doubts about the quality of European banks,” Economy Minister Luis de Guindos said. “We need to guarantee a level of quality capital that is enough to face future crises,” he told reporters as he arrived at the talks.


Note EU-Digest: The European Central Bank provides EU banks with 1% loans which they lend to out with a 6 percent interest rate or more to othe countries and institutions.. 

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