European Central Bank President Christine Lagarde on Friday reaffirmed the strength of the eurozone’s banking system to European leaders meeting as part of a summit, as fears of a financial crisis dragged markets.
Lagarde assured the leaders of states and governments meeting in Brussels that “the banking sector in the euro area is resistant because it enjoys solid foundations in terms of capital and liquidity,” according to what a European official said.
German Chancellor Olaf Welts sought to reassure the health of Deutsche Bank, the largest in Germany, which recorded a significant decline in the Frankfurt Stock Exchange.
At the end of the summit, he said, “Deutsche Bank has reorganized its economic model and is now achieving great profitability. You should not worry about anything.” He also stressed that “the banking system in Europe is stable.”
French President Emmanuel Macron said, for his part, that “the foundations of European banks are solid, and the euro area includes the most solid banks.”
Lagarde also stressed that the eurozone “imposed reforms on all institutions in terms of controls agreed upon at the international level after the global financial crisis.”
“The recent developments remind us of the utmost importance of continuous improvement of controls. We must now move towards achieving banking unity,” she indicated during the meeting with European leaders, according to what the European official quoted her as saying. And it saw the need to “make additional efforts to establish real European capital markets.”
And she repeated what she said in recent days that “there is no compromise between price stability and financial stability. The tools available to us allow us to face the risks facing both.”
She added, “With regard to financial stability, the European Central Bank has the necessary tools to provide liquidity to the financial system in the euro area, if needed.”
Markets fell on Friday in Europe due to the decline of banks, whose durability is feared, after the failure of three US banks and the rescue of Credit Suisse.
