The European Parliament’s Economic and Monetary Affairs Committee has heard that new European Central Bank powers to oversee eurozone banks will help restore confidence.
That’s the view of Mario Draghi the banks president who also told the committee that he believed the deal will help revive interbank lending.
“We end the year on a positive note with the re-launcing of the longer term vision and most recently with unanimous agreement by the ECOFIN to establish a single supervisory mechanism. This is a clear demonstration that European institutions are determined to act in a timely and decisive way to complete the European monetary union,” he said.
Ministers clinched a deal last week to give the ECB oversight of around 150 of the bloc’s 6,000 banks although it will have the authority to intervene in smaller banks if there are signs of trouble.
Mario Draghi also told the committee the medium term outlook for the eurozone economy remained, “challenging”.