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Frankfurt - German Economy Minister Rainer Bruederle pre0ssed banks again on Wednesday to increase lending as the government named a "credit mediator" to boost the number of business loans.
Bruederle urged banks to "fulfill their duties" to the wider economy in an interview with the public television channel ZDF.
"Taxpayers extended generous aide to help you avoid bankruptcy," he said in reference to massive state aid extended to the troubled banking sector a year ago.
Financial institutions now had ample possibilities to increase lending, the economy minister added.
The ministry then announced that it would propose that Hans-Joachim Metternich be named as a credit mediator to help Germany's small and medium-sized enterprises obtain loans needed to fund their operations.
France has already created such a position "with great success," Bruederle said.
A summit was planned in Berlin later in the day with representatives from companies, federations and unions to discuss the threat of a credit crunch in Europe's biggest economy.
The German economy minister and Chancellor Angela Merkel have both warned that a generalised credit crunch was possible next year.
Capital Economics economist Jennifer McKeown noted that in its last Financial Stability Report, the German central bank said German banks might still have to write off €90bn ($135bn) in losses on loans and securitised instruments.
The would imply "that the sector is not even halfway through its potential losses," McKeown said.
She added however that "for the time being at least, German banks' losses have been much smaller than those elsewhere, amounting to about 2% of GDP (gross domestic product) compared to around 4% in the US and UK."
- AFP
