No liquidity shortage in EU banking system: ECB
Updated: 2011-08-30 07:15
BRUSSELS - European Central Bank (ECB) President Jean-Claude Trichet said on Monday that there was no liquidity shortage in European banking system.
"There is no liquidity or collateral shortage for the European banking system," Trichet said in a statement at European Parliament Committee on Economic and Monetary Affairs in Brussels.
In view of the turmoil in global financial market recently, the ECB had decided earlier this month to continue its refinancing operations at least till mid-January 2012, said Trichet.
"Currently about 470 banks participate as counterparts in our refinancing operations; and over 6,000 banks are potentially eligible," Trichet added.
Additionally, the ECB resumed bond market interventions this month with an aim to restore some market segments that were "dysfunctional," though the interventions would not influence its policy stance, he affirmed.
The ECB chief also urged eurozone governments to implement the second Greek bailout plan reached on the eurozone summit last month which decided to allot Athens 109 billion euros ($157 billion) to weather the debt crisis.
"The full and timely implementation of the July 21 agreement between heads of state or government is of essence in this respect, " said Trichet.
Meanwhile, he called for strict budgetary discipline from government, which, in his words, was of "the utmost importance."
In the statement Trichet noted that the real GDP growth in the eurozone area slowed to 0.2 percent in the second quarter on the quarterly base while the general economic growth would maintain a "modest pace" with sound economic fundamentals and high uncertainty mixed.
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