Action being taken to sort out weak banks, EU tells IMF

Action is already being taken to prop up under-funded banks, the European Union's executive said Monday in response to criticism from the International Monetary Fund (IMF), according to dpa. On the weekend, IMF chief Christine Lagarde warned that European banks - which are exposed to the eurozone's sovereign debt crisis - needed "urgent recapitalization." "The process is ongoing, everything is ready for it to proceed correctly," Amadeu Altafaj, spokesman for EU economy commissioner Olli Rehn, told reporters in Brussels when questioned about the Lagarde comment. In July, eight out of 90 banks - one from Austria, five from Spain and two from Greece - were revealed as under-capitalized by European stress tests. Altafaj said they have "six to nine months" to raise funds on the markets; failing that, public funds would step in. The official also pointed out that overall, "European banks are significantly better capitalized now than a year ago."