Salgado: reinforcing banks' capital a "good idea"

 

Spanish Economy Minister Elena Salgado said on Tuesday she supported the idea of banks having more capital, but that problems at Franco-Belgian Dexia SA did not pose a threat to the European banking sector as a whole.

"A lot of banks are under pressure, in particular those with Greek debt on their balance sheet," she told reporters after a meeting of European Union finance ministers, when asked about the implications of Dexia's troubles for the sector.

"Hence, this idea that banks should have more capital is a good idea."

Asked if the ministers had tackled the issue of recapitalising European banks, she said it had not been formally discussed, adding that the next series of European banking "stress tests" should take better account of the sovereign exposures of banks.

"What we have to do is to cut the relation between the debt crisis and the banks' balance sheets and it would be good to strengthen (these balance sheets)."