Berlin - German banks and industry issued a joint appeal Wednesday on the eve of the G20 summit for Berlin to help banks write off toxic debts, so as to restore health to the credit sector.

Germany has so far resisted calls for the public sector to set up a "bad bank" to take over under-performing debts and allow banks to start afresh with balance sheets stripped of shaky loans, but the government has not set out what else it might do.

"The uncertainty about whether more assets need to be written down may ultimately threaten the entire supply of credit to industry," said the joint statement from the German banking federation, the BDI federation of industries and the BGA foreign trade federation.

"Trust between the banks has not been restored yet," the statement issued in Berlin said, adding that it was "especially urgent" to eliminate bad loans from banks' balance sheets. (dpa)