IMF chief stresses need to strengthen European banks

International Monetary Fund (IMF) Chief Christine Lagarde stressed Monday the need to reinforce European banks to enable them to continue financing economy and survive the ongoing financial crisis. "Banks have to continue financing economy. It's the right solution which will be able to create jobs and be adequate for enterprises' investment decisions", Lagarde told local broadcaster Europe 1. She is glad that all stakeholders, including supervisory authorities, the European Central Bank, the European Commission and banks themselves, have recognized the "need to strengthen the banks and increase the capital of some of them," the former French finance minister added. European banks must first seek recapitalization by themselves before enlisting public help because "there are many banks today that can appeal to their shareholders," she said. "The priority is, of course, they (European banks) can get capital from their shareholders ... and as a last resort, if those means were not available and sufficient, a more collective way will be set up," the IMF director said. Banks in the region face pressure to find enough financial resources to withstand eventual heavy losses due to the sovereign debt crisis. Recapitalization terms are still under consideration as volatile markets await concrete measures to end a series of choppy trading sessions and restore confidence in the region's financial systems.