ECB President Mario Draghi Discusses Banking Sector Confidence

ECB President Mario Draghi closed out his Frankfurt press confernce with comments on improving confidence in the European Banking sector.
By Amanda Schiavo ,

NEW YORK (TheStreet) --European Central Bank President Mario Draghi spoke at a press conference in Frankfurt on Thursday. The ECB President had been taking a number of questions in regards to the stability to the European banking sector and what should be expected following Brexit.

Bloomberg TV had live coverage of the ECB President's comments this morning. 

One reporter questioned Draghi on the solvency of European banks and the improvements Europe has seen since the financial crisis, as well as the concerns about profitability. The reporter asked if Draghi believes there is still a lack of confidence in the banking sector and if investors are "overemphasizing the risks."

Before responding to that question, Draghi answered the reporter's second question looking for a stance from the ECB President on the "fractured European Union, low growth, terrorism, geopolitical risks fueling nationalism" and a lack of response to these issue by politicians.

"Our response lies in achieving our mandate and achieving or objective. Our response lies in ensuring what we call price stability that in fact amounts to growth and job creation," Draghi said. "Our response lies in making sure the labor markets continue to improve."

Draghi called this the "domain" of the ECB, saying that these responses are the job of the ECB, as well as to address the worry coming from the rest of the world.

Going back to the reporter's first question Draghi didn't want to underplay the situation by saying it is not a solvency problem or a future profitability problem.

But, "figure-wise we see that from a solvency viewpoint the banks are better off than years ago. Certainty they do have profitability issues and especially banks with high shares of NPLs," Draghi said.

Some of this has to do with the poor performance in the last few years, but the ECB President has confidence that strong supervision and "robust regulation" as well as improved communication by supervisory authorities will improve the situation and the world's perception.

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