ECB urges banks to bolster balance sheets
(PARIS) - The head of the European Central Bank (ECB) on Wednesday urged European banks to strengthen their balance sheets by setting aside profits and to refrain from giving out "excessive" bonuses.
"Strengthen yourselves by setting aside a substantial part of your profits to strengthen your balance sheets," ECB chief Jean-Claude Trichet said in an interview with French radio station BFM.
Trichet also said banks should not give out "excessive" bonuses and start lending more. "We are calling on banks to do their job, their duty to the state... to finance the economy," he said.
"The road before us is chaotic and there is major uncertainty," he added.
ECB data earlier this week showed bank lending to the private sector in the 16-nation eurozone shrank in September for the first time on record.
The International Monetary Fund has also urged Europe to clean up its banks by strengthening balance sheets, recapitalising or allowing some banks to fail.
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