Banking body issues warning

Banks will need a healthy push by governments to fix balance sheets, abandon risky businesses and serve the public to avoid prolonging the financial crisis, the Bank for International Settlements said.

Lenders, almost four years after the collapse of Lehman Brothers, still hold overvalued assets and are postponing necessary recapitalisations while relying on official funding, especially in Europe, the BIS said in its annual report released yesterday.

Banks are also returning to risks akin to those that led to the crisis, it said, adding that governments need to put more pressure on them by enacting and enforcing new rules.