European banks are threatening global financial stability: IMF (AFP)

WASHINGTON (AFP) - unhealthy European banks are the greatest threat to global financial stability, and they need to find fresh capital, the Monetary Fund International said Wednesday.

The IMF, "many institutions — particularly weak European banks - are taken in a whirlwind of interrelated pressures which are increasing risks to the system, as a whole" said in its global financial stability report.

"Remaining structural weaknesses and vulnerabilities in the euro area still pose a risk to the significant decrease otherwise addressed in all their aspects, he said."

IMF 187 - developed nation warning against a threat funding challenge for banks and countries dealing with sovereign debt problems, particularly in some euro area countries vulnerable."

Because of the global financial crisis, he said: "banks have sought to increase the quantity and the quality of the capital, but progress has been uneven, with European banks, generally behind us banks."

"These low levels of capital are some German banks so that banks low savings Italian, Portuguese and Spanish, the vulnerable to other shocks".

Europe does not escape to, IMF economists said a restructuring of the failure of banks and a recapitalization of viable banks.

"But it is likely that some of the capital will have to come from public sources," they said.

The Fund based in Washington, said capital could build financial institutions by reducing the coefficients of payment of dividends and to retain a greater proportion of earnings.

Another possible measure would be a gradual downsizing of budgets to reduce capital and financing needs.

Such moves could help prevent fire sales of assets, which would only intensify the problems in the global financial system.

"The world's banks face a wall of maturation with $ 3.6 billion because of the debt due over the next two years." Bank debt rollover requirements are more acute for Irish and German banks, said the IMF.

"Heavy debt weigh on economic activity and threat of financial stability by making the more fragile balance sheets." When the debt is high, its sustainability becomes more in more sensitive to changes in funding costs and turnover rates. ?

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