Distressed banks must be able to recapitalize themselves directly from the eurozone, without having to resort to the Troika. The president of the European Central Bank, Mario Draghi, heard today in the European Parliament, declared that Frankfurt is studying how to use the permanent bailout fund (ESM) to directly recapitalize troubled eurozone banks, without necessarily having to resort to the aid programs of the ECB-EU-IMF.
Discussions are underway "on the use of ESM funds for recapitalization, whether they can be resorted to directly and not through governments", Draghi explained to MEPs during a hearing on the first annual report of the European Risk Committee systemic (ESRB). "Governments can access the ESM to recapitalize banks only after signing a memorandum of understanding" with the Troika. Instead, Draghi concluded, “we want the ESM to be used more and in a more useful way” compared to the temporary bailout fund (EFSF).
And the governor of the Bank of Italy, Ingazio Visco, declared today during his speeches along the same lines first final considerations in Via Nazionale that sthey need "rapid progress in setting up a European bank resolution fund“. Draghi's proposal is that of aBanking union able to curb the risk of contagion.
The main problems are those of the Spanish bank Bankia. The Madrid government would like to recapitalize it with European funds, but absolutely does not want to ask for an aid program from the Troika, as Ireland, Portugal and Greece have done so far.
