8 Jul 2009

Bank control plans backed in Europe

6:15 am on 8 July 2009

European finance ministers have agreed proposals which would force banks to put aside more money in good times to help them weather tougher periods.

The plans are aimed at helping to stop financial institutions from lending too much money when economic growth is high and to lend more in bad times.

The European Commission is due to create legislation in October.

The BBC reports the pledge is similar to plans already agreed by the United States and Britain and among those put forward at April's G20 summit.

However, Germany, wants to delay the changes - saying that restrictions will make it harder for banks to get out of the recession in reasonable shape.

The proposals are aimed at ensuring that the 27-nation EU is better prepared for any repeat of the global financial crisis.