BIS Says Banks Need ‘Healthy Push’ to Stop Prolonging Crisis

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.

Almost four years after the collapse of Lehman Brothers Holdings Inc., lenders still hold overvalued assets and are postponing necessary recapitalizations 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, and governments need to put more pressure on them by enacting and enforcing new rules.