Merkel spells out how to bolster banks

Merkel spells out how to bolster banks

Berlin: German Chancellor Angela Merkel said Europe’s banks should look first to raise money in the private sector before turning to governments to bolster their financial cushions against potential losses from the continent’s sovereign debt crisis.

An upcoming summit of the bloc’s 27 leaders should send a “signal" regarding a coordinated recapitalization of Europe’s banking sector to ensure the “real economy keeps functioning," Merkel said Friday in Berlin.

Merkel said a recapitalization, if necessary, will have to follow a clear “hierarchy," with banks being pushed first to seek fresh private investment.

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