Financial Times FT.com

EU urges banks on extra reserves for loans

By Tony Barber in Brussels

Published: January 20 2009 09:46 | Last updated: January 20 2009 17:00

European Union finance ministers agreed on Tuesday on fresh efforts to restore the flow of bank credit to pre-crisis levels, saying it was vital to maintain loans during the developed world’s worst recession in 60 years.

Ministers approved an initiative under which banks will be encouraged to use increased capital reserves not merely to meet regulatory requirements but to make new loans to business.

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