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European Union leaders warned of continued weakness in the banking system and pledged to “stay alert” to the possible need for further government support, according to the draft of a statement to be approved later today at a Brussels summit.

“The operating environment of the financial institutions remains challenging and credit flows continue to be constrained,” the heads of state and government said in the draft obtained by Bloomberg News. “Governments must therefore stay alert to possible further measures which may be needed to recapitalize or to clean up balance sheets.” profitability.”

European governments have approved $5.3 trillion of aid to banks, including debt guarantees and equity injections, since the onset of the financial crisis, according to a separate EU document obtained by Bloomberg. Regulators in the 27 EU nations will assess risks in the banking industry and report the results to finance ministers, the Committee of European Banking Supervisors in London said last month payday loans for bad credit.

“The ongoing EU-wide stress-testing exercise will help to better assess the financial system’s resilience, contribute to enhancing confidence of financial markets and facilitate coordinated policy measures at EU level,” the EU leaders said in today’s draft statement.

The worldwide financial crisis, which started with the collapse of the U.S. property market in 2007, has led to more than $1.46 trillion of writedowns and credit losses at other financial institutions, according to data compiled by Bloomberg, and sent the global economy into its first recession in more than six decades.

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