Public Hearing with Mario DRAGHI, Chairman of the European Systemic Risk Board:
EP Committee on Economic and Monetary Affairs
Lieu: Brussels, Belgium - EC
End production: 08/07/2013 First transmission: 08/07/2013
MEPs of the Committee on Economic and Monetary Affairs held a meeting with European Central Bank President Mario DRAGHI. In the first part of the meeting, Mr. DRAGHI addressed the ECON-Members in his role as chair of the European Stability Risk Board and presented the ESRB Annual report. According to the report, ESRB engaged in a regular review of systemic risks to the EU financial system. Mr. DRAGHI has identified as key issues the interaction between the creditworthiness of European sovereigns, the increasing difficulty of banks in collecting funding, and weakening economic growth. As a result, ESRB issued three public recommendations: i) the macro-prudential mandate of national authorities; ii) lending in foreign currencies; and iii) US dollar-denominated funding of credit institutions.
Only the original language version is authentic and it prevails in the event of its differing from the translated versions.
||Exterior view of the European Parliament building in Brussels
||General view of the ambience during the meeting (10 shots)
||SOUNDBITE (English) Mario DRAGHI, Chairman of the European Systemic Risk Board: "At the ESRB we want to ready as for January 2014 for the new rules of the CRD IV/CRR has allocated to us. At the same time we want to assist the national macroprudential authorities in using new instruments by providing them with an operational framework that can effectively guide them."
||SOUNDBITE (English) Mario DRAGHI, Chairman of the European Systemic Risk Board: "What the ECB is done is basically say: Look, do not unravel the progress that these countries, and Portugal specially, have achieved on fiscal consolidation, but made this fiscal consolidation growth friendly. Lower your taxes, lower your current expenditures, make structural reforms."
||SOUNDBITE (English) Mario DRAGHI, Chairman of the European Systemic Risk Board: "There has been cases where the amount of needed delivering was very big to begging with where a great progress has been achieved. If you look at the case of Spain, for example, the household private debt to gross disposable income rate is lower today than it was in 2007."
||SOUNDBITE (English) Mario DRAGHI, Chairman of the European Systemic Risk Board: "You ask the question: is the ESRB make any difference? I think the answer has to be: Yes, but it is going to take more time to appreciate this fact. Yes, because it is the only place where we have all the member of the Union sitting around the table sharing not only information but also policy making in the macro prudential area."
||SOUNDBITE (English) Mario DRAGHI, Chairman of the European Systemic Risk Board: "I think the ESRB is being quite useful, even in the public way, in helping different countries to overcome. I think I would agree with you, we should do more out of it."
||SOUNDBITE (English) Mario DRAGHI, Chairman of the European Systemic Risk Board: "Higher interest rates it is true that it would take care of theses risks on one hand. On the other hand, higher interest rates on a weak economic situation, would tend to destabilised the country basically making the life of your counterparties, which often are already in a weak situation even difficult, even weaker."
||SOUNDBITE (English) Mario DRAGHI, Chairman of the European Systemic Risk Board: "In the Union the main systemic risk that I see today is the prolonged recession. The prolonged recession is basically weakening the banking system, is increasing the risk premia; is weakening the creditworthiness of counter parties."
||Cutaways (5 shots)