Bank bosses call for bigger 'firewall'

Eurozone leaders risk reigniting the sovereign debt crisis, unless they agree more funds for the so-called "firewall" designed to calm bond markets, the world's top banking group warned last night.

The Institute of International Finance, which represents 450 banks and finance houses, said the eurozone must expand the €800bn European Stability Mechanism created to fund bailouts of member countries. Such an expansion is the only way to unlock extra money from the International Monetary Fund and finally remove the possibility of a disorderly break-up of the eurozone, IIF managing director Charles Dallara said in an open letter to the IMF and World Bank bosses.

The IMF and World Bank are meeting in Washington next week.