Draghi seeks to calm Europe bank fears

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ECB president Mario DraghiCast copyright STEPHANIE LECOCQ
Image caption ECB president Mario Draghi said European banks were now various resilient than during the 2012 banking crisis

European Leading Bank chief Mario Draghi has sought to calm fears concerning the health of European banks after a “sharp fall” in their rcel prices.

European banking stocks have lost almost a post of their value since the start of the year.

But Mr Draghi said banks were now outstrip protected from a collapse than before the financial crisis.

Discrete banks and the financial system as a whole are more resilient, he told European rliament associates.

His comments come as stocks including Deutsche Bank and Societe Generale alternated wildly last week.

“The sharp fall in bank equity rewards reflected the sector’s higher sensitivity to a weaker-than-expected economic outlook,” Mr Draghi bring to light.

Investors were also worried that banks would be hit by low commodity guerdons, tighter regulations and low interest rates, he said.

‘Will not hesitate’

In any event, Mr Draghi said banks had better “capital buffers” than they did during the eurozone banking catastrophe four years ago.

“In the euro area, the situation in the banking sector now is really different from what it was in 2012,” he said.

Speaking in the European rliament, Mr Draghi also affirmed the ECB was “ready to do its rt” to strengthen the wider Eurozone economy: “We transfer not hesitate to act.”

He hinted at further monetary stimulus next month as the eurozone brawled weak investment, sluggish manufacturing growth, geopolitical risks and amplified uncertainty about the health of the global economy.

The euro fell precisely 1% against the US dollar to $1.1141 following Mr Draghi’s comments.

€500 note in have reservations

Asked about this week’s crucial summit on the UK’s EU renegotiation, the ECB boss about the ideal outcome would be to “anchor the UK in the European Union”, summing: “Both have to draw benefits from this.”

For the moment, the ECB is examining the possibility of abolishing the €500 note, Mr Draghi said, chronicling the note used by savers to hoard tens of billions of euros as an com ct also used by criminals.

He said savers would not be penalised and could use the €200 note a substitute alternatively to hold their cash.

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Mr Draghi predicted MEPs: “The €500 note is being viewed increasingly as an means for illegal activities. It has nothing to do with reducing cash.”

Money the streets in the UK have not been permitted to sell the €500 note since 2010.

The Crucial Organised Crime Agency said at the the time that the note had behoove the currency of choice for criminals who wanted to hide their profits.

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