ECB Policymaker: ECB Can Not Solve Root Cause of the Banking Crisis, Can Only Alleviate Some Pressure

“MILAN (Reuters) – The European Central Bank can alleviate some pressure on banks struggling to cope with capital shortfalls and funding strains, but a wider policy response is needed to tackle the underlying structural problems, ECB policymaker Peter Praet said on Friday.

The ECB flooded financial markets in December and February with more than one trillion euros in 3-year loans to ease banks’ funding strains in the aftermath of the financial crisis.

Praet said there was some evidence that ECB liquidity injections had helped in supporting credit provisions, but he stressed that broader measures were needed.”

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