Draghi Passes Ball to European Politicians Hands Reform Needed

European Central Bank President Mario Draghi said on Thursday he expects bank lending, a key impediment to growth in the euro zone at the moment, to pick up early next year.

The ECB is putting the euro zone’s 131 largest banks through a thorough balance sheet review to weed out soured loans and check whether they have valued assets correctly before it takes over as their new centralised supervisor in November.

Draghi said since the summer last year, banks that will come under its direct watch from November had strengthened their balance sheets by almost 203 billion euros, through capital hikes, bond issuances or retained earnings for instance.

The clean up will put banks in a better position to lend, which is important for the recovery in the euro zone that relies strongly on bank funding.

via CNBC

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Alfonso Esparza

Alfonso Esparza

Senior Currency Analyst at Market Pulse
Alfonso Esparza specializes in macro forex strategies for North American and major currency pairs. Upon joining OANDA in 2007, Alfonso Esparza established the MarketPulseFX blog and he has since written extensively about central banks and global economic and political trends. Alfonso has also worked as a professional currency trader focused on North America and emerging markets. He has been published by The MarketWatch, Reuters, the Wall Street Journal and The Globe and Mail, and he also appears regularly as a guest commentator on networks including Bloomberg and BNN. He holds a finance degree from the Monterrey Institute of Technology and Higher Education (ITESM) and an MBA with a specialization on financial engineering and marketing from the University of Toronto.
Alfonso Esparza