BRUSSELS, Belgium - Big banks found themselves under pressure in Europe's debt crisis Saturday, with finance chiefs pushing them to raise billions of euros in capital and accept huge losses on Greek bonds they hold.
The continent's biggest financial institutions were at the center of talks as leaders entered marathon negotiations in Brussels, at the end of which they have promised to present a comprehensive plan to take Europe out of its crippling debt crisis.
"Between now and Wednesday we have to find a solution, a structural solution, an ambitious solution and a definitive solution," French President Nicolas Sarkozy said as he arrived in Brussels. "There's no other choice."
In addition to new financing for Greece, leaders want to make the banking sector fit to sustain worsening market turmoil and turn their bailout fund into a strong safety net that will stop big economies like Italy and Spain from falling into the same debt trap that has already snapped Greece, Ireland and Portugal.
But before the final deadline on Wednesday, they have to overcome many obstacles.
On Saturday, the finance ministers of the 27-country European Union decided to force the bloc's biggest banks to substantially increase their capital buffers - an important move to ensure that they are strong enough to withstand the panic that a steep cut to Greece's debt could trigger on financial markets.
A European official said the new capital rules would force banks to raise just over (euro) 100 billion ($140 billion), but finance ministers did not provide details on their decision. The official was speaking on condition of anonymity because it had been agreed to let leaders unveil the deal at their first summit today.
by Gabriele Steinhauser Associated Press Oct. 23, 2011 12:00 AM
Europe's big banks under pressure in crisis
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