ECB chief Mario Draghi has said some good news from two major eurozone economies has helped him detect the first signs of a slow recovery in the debt-stricken area. Banking supervision will remain key.
European Central Bank President Mario Draghi on Friday expressed some optimism about the euro area's outlook amid promising signs of improvement in the region's two biggest economies, Germany and France.
He told a European Banking Congress in Frankfurt, Germany that a slow return to confidence in the eurozone was under way. His remarks came after a closely watched index saw German business confidence gaining a surprise win and a French survey pointing to industry leaders raising their expectations of economic developments over the next few months.
Draghi insisted financial markets had become more stable after the ECB's announcement it was prepared to relaunch its controversial bond-buying program to keep troubled nations' borrowing costs at bay.
Central control of the banking sector
The ECB president also made a point of stressing that eurozone banking supervision must involve all banks in the 17-member area, and not just the big ones. "To preserve financial stability, the supervisory board would be able to assert control over all banks in participating countries," Draghi maintained.
He argued that because of all banks' close interaction, even the collapse of smaller lenders could wreak havoc across the bloc. He said in some nations, more than 60 percent of all assets were concentrated in small banks, and letting those lenders out of the equation would be dangerous.
Draghi hoped the legal basis for the new supervisory board would be in place by January next year, but analysts had warned the process might take years, given the different interests and priorities in eurozone countries.
hg/dr (dpa, dapd)