The centralization of supervision in the hands of the ECB will help unblock the current deadlock of the interbank market in the Eurozone. The innovation will thus bring greater stability to the financial system, helping to sever the link between the credit sector and government bonds. Eurotower number one said today, Mario Draghi, during a hearing in the European Parliament.
The President of the European Central Bank considers the agreement reached last week by Ecofin on the issue of unified supervision of European systemic banks. The Understanding "it can be a game-changer and will help restore confidence“. It is a tool that “will restart interbank lending and which will have tangible effects on the real economy".
Furthermore, according to Draghi, the new role attributed to the central institution of the euro area will make new decisions on monetary policy easier, without interfering at all with price stability.
The former governor of Bank of Italy then clarified that the intensity of controls by the ECB will be directly proportional to the size and importance of the various credit institutions.
“The European Central Bank will have full powers and the possibility of making up for the banks it will supervise directly, but it will be able to request information from all banks – Draghi explained again -. I don't think we will have a fragmented banking system. To date there are 130-150 banks that will be under direct supervision, but we are far from being able to say what is meant by direct supervision”.
The future ECB body that will be responsible for European banking supervision will be "strictly separate" from the current Governing Council, so much so that not even the ECB president himself will be part of it.
As for the general trend of the economy in the Eurozone, Draghi reiterated that he expects "that the weakness of the Eurozone economy will continue next year as well". To see the beginning of a "very gradual recovery" we will have to wait for the second half of 2013, when a recovery in global demand and an improvement in the market scenario should take place. “The economic outlook remains challenging,” Draghi concluded.
