Out-Law News | 20 Nov 2014 | 2:50 pm | 1 min. read
Mario Draghi told the parliament’s economic and monetary affairs committee that there is "a vast scope for more coordination of sanctions against banks between the US and Europe".
The ECB is also prepared to “take unconventional measures”, such as the purchase of government bonds, if the economic situation in the euro needs them, Draghi said.
However, Draghi said banking union was following a year of “profound change for the euro area and the union as a whole.... with legislative and institutional progress on many fronts”.
Draghi said greater integration of the financial markets through the capital markets union would “reduce fragmentation of financial markets, improve funding to small and medium enterprises, enhance the transmission of the ECB's monetary policy, and overall benefit economic growth".
The momentum of growth in the euro area weakened over the summer and “most recent forecasts have been revised downwards”, but the ECB’s “expectation for a moderate recovery in 2015 and 2016 remains in place”, Draghi said.
Draghi said monetary policy alone “cannot overcome financial fragmentation in the euro area”. He said there is “an urgent need to agree on concrete short-term commitments for structural reforms in (EU) member states” that can set out investment strategies and launch work on a “long-term vision to further share sovereignty ensuring the sustainable and smooth functioning of European monetary union”.
The ECB, which became the single supervisor of banks in the eurozone earlier this month, said recently that it had found a capital shortfall of €25 billion at 25 of the largest 130 banks of which it will have oversight. It said banks identified as having capital shortfalls would be required to take remedial actions and to submit capital plans within two weeks of the public disclosure of the results detailing how the shortfalls would be covered.