UK finance minster urges banking clean up

By AFP

July 15, 2010 Updated Jun 14, 2009 at 9:41 PM CDT

Britain's finance minister, Alistair Darling, has warned in an interview that other countries must abide by promises to clean up their banks if their economies are to recover from the downturn.

Ahead of a meeting of the Group of Eight (G8) finance ministers in Italy this weekend, the Financial Times reported that Darling suggested some European countries had been turning a blind eye to problems of undercapitalisation and toxic assets in their banks.

"In relation to cleaning up the banks -- that's essential and every single country, if there's a problem, you need to sort it," he told the paper.

"Because if you don't sort that problem you'll never sort out the economy. Credit is essential in every modern developed economy."

He also said that the volatile oil price "has the potential to be a huge problem as far as the recovery is concerned", and said he was keen to restart international efforts to increase the transparency of oil supply.

"It's up to us this weekend... that we say, 'look, we need to work with you (oil producing nations), at the end of the day we're all in this together and we have to sort it out together'," the chancellor of the exchequer said.

Amid encouraging signs for the British economy, including a rise in manufacturing output, Darling said he remained "confident" that Britain would pull through the recession but "people should not become complacent".

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