WASHINGTON: The global banking system still has "pockets of weakness" that require rapid patching, the head of the Financial Stability Board, Mario Draghi, said Saturday.
"The ongoing international program of financial reforms is strengthening the robustness of the global financial system," Draghi said at the annual spring meetings of the International Monetary Fund and the World Bank in Washington, according to a prepared speech.
"However, pockets of weakness in the banking system remain and sovereign and banking risks are closely intertwined in some countries," he told a closed-door meeting of the International Monetary and Financial Committee, the Fund's 24-nation steering panel.
According to Draghi, governor of Italy's central bank, "there is a need to decisively press ahead with the repair and strengthening of weak banking systems, using the forthcoming rounds of stress tests to address expeditiously any weak points identified."
In Europe, authorities plan to submit 90 banks, representing more than 65 percent of banking assets in the European Union, to new, tougher stress tests this year in a bid to reassure markets unnerved by Ireland's banking crisis.
The Financial Stability Board that Draghi heads was tasked with reform of the global banking system to prevent a repeat of the 2008 financial crisis that pushed the global economy into recession.
Comments
Comments are closed for this article.