EUROPEAN BUSINESS SUMMIT 200926.03.2009 / 14:48 CET
Lucas Papademos calls for measures to help banks get rid of bad assets
Lucas Papademos, a vice-president of the European Central Bank (ECB), said today that governments should speed up measures to help banks get rid of bad assets.
“A lot has been done. What is important is to implement at greater speed what has been decided by governments,” he said. "Huge commitments have been made, but actual implementation has been rather slow.”
The EU and US have agreed approaches to help banks get rid of impaired assets in a bid to get banks lending again.
The ECB had provided “unlimited liquidity” to the financial sector by expanding the balance sheet of the euro system by 70%.
“The economic and financial situation are characterised by synchronised decline in economic activity associated with collapse of world trade and growing signs of an adverse feedback loop between the real economy and the financial sector,” he said.
Papademos also defended the reluctance of EU governments to agree additional economic stimulus measures. He said that eurozone countries had agreed a stimulus worth 2% of gross domestic product in 2009 and 2010 which he called a “substantial fiscal stimulus”.
He pointed out that automatic stabilisers, increased public spending on unemployment benefit as the number of jobless rose in a downturn, were stronger in Europe than in the US. “An appropriate fiscal stimulus need not rely so much on additional discretionary measures as elsewhere,” he said, referring to calls from the US for the EU to provide a greater stimulus.
“A lot has been done. What is important is to implement at greater speed what has been decided by governments,” he said. "Huge commitments have been made, but actual implementation has been rather slow.”
The EU and US have agreed approaches to help banks get rid of impaired assets in a bid to get banks lending again.
The ECB had provided “unlimited liquidity” to the financial sector by expanding the balance sheet of the euro system by 70%.
“The economic and financial situation are characterised by synchronised decline in economic activity associated with collapse of world trade and growing signs of an adverse feedback loop between the real economy and the financial sector,” he said.
Papademos also defended the reluctance of EU governments to agree additional economic stimulus measures. He said that eurozone countries had agreed a stimulus worth 2% of gross domestic product in 2009 and 2010 which he called a “substantial fiscal stimulus”.
He pointed out that automatic stabilisers, increased public spending on unemployment benefit as the number of jobless rose in a downturn, were stronger in Europe than in the US. “An appropriate fiscal stimulus need not rely so much on additional discretionary measures as elsewhere,” he said, referring to calls from the US for the EU to provide a greater stimulus.
( Retirado do jornal holandês EUROPEAN VOICE - 26.03.09 )
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