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10 September 2011

FT: Lagarde softens stance on EU banks


Christine Lagarde has softened her stance on the amount of capital needed by European banks.

Ms Lagarde, IMF managing director, confirmed that the Fund was revising its estimates of the loss of tangible equity in European banks on Saturday, saying the estimated capital losses of €200 billion were “tentative” and the Fund was “in discussions with our European partners to assess the global methodology” until the final estimates are published in a Fund paper released shortly before its annual meetings in a fortnight.

While the IMF and Europe resolved some of their differences, G7 ministers faced with diverse reasons for stalled growth agreed to implement different strategies in each country rather than a co-ordinated plan of action. Ministers pledged to stand behind their financial systems, taking “all necessary actions to ensure the resilience of banking systems and financial markets”, to enact “growth enhancing fiscal consolidation” and they repeated their call for “a concerted effort at global level in support of strong, sustainable and balanced growth”.

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© Financial Times


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