Business | Economy

ECB official warns financial crisis will continue to dog global banks

Draghi says Europe is better protected than US or emerging markets.

  • Reuters
  • Published: 00:02 September 14, 2008
  • Gulf News

Nice, France: Banks are a long way from emerging from the crisis affecting the world financial system, Mario Draghi, a European Central Bank (ECB) Governing Council member and the head of the Financial Stability Forum, said on Saturday.

Speaking after a meeting of European Union finance ministers and central bankers in Nice, the Italian central bank chief told reporters the banking sector was adequately capitalised but that some institutions would face problems as the crisis continued.

"Various banks - within a sector that is basically well capitalised overall - will be in difficulty," he said, adding that European banks seemed to be far better protected from the crisis than US or emerging market counterparts.

"The conclusion is that there will be a series of consolidations in the world banking system. We've seen some already but we are a long way from seeing the end of this."

His comments came as US officials worked to broker a deal to sell investment bank Lehman Brothers, the latest victim of a crisis that has shaken the US banking sector and had knock-on effects across the global financial sector.

As head of the Financial Stability Forum, the group set up in 1999 to improve supervision and surveillance in the wake of the Russian and Asia financial crises, Draghi is a strong advocate of more efficient regulation.

He said it was in the banks' own interests to provide better information.

"The less transparent the banking system is, the more the market will require capital," he said.

  • Rate this article
  • Average reader rating (0 votes) 0 Stars
Tools

Emailing an article to friend is a simple way to share a news item. Your friend will receive an email with your name and email address as well any personal message you choose to send.

The information you provide on this page will not be used to send unsolicited emails.

This service is not intended to encourage spam, and action may be taken against individuals who maliciously enter personal details of another individual.

Share this article

More from Economy

  1. Lending slows down in eurozone

  2. Fed fights to keep independence

  3. Dollar drops to 14-year low against yen

  4. Merkel will push German banks to avoid credit crunch

All articles in Economy

More from Business

Gulf News
Popular in Business
Airlines in the region
Budget travel

Airlines in the region

Take a pictorial look at some of the budget airlines in GCC

Business Editor's choice