The euro zone’s economic recovery is unsatisfactory and fresh efforts are needed to strengthen growth, particularly since trust in national and EU political institutions is low, European Central Bank Executive Board member Yves Mersch said.
“In the financial sector, remaining fragilities in the banking sector need to be fixed and the banking union completed,” Mersch told a conference on Saturday.
“Otherwise, market participants will continue to fear that local vulnerabilities could eventually spread and destabilise the European banking system before all the firefighting tools are ready to be deployed,” he said in Cernobbio, Italy.
In a largely academic speech that did not discuss current monetary policy, Mersch added at the ECB would not resort to extreme measures to fulfil its inflation mandate but it would also not accept a legal violation of the mandate.
Source: Reuters (Reporting by Balazs Koranyi; Editing by Jon Boyle)