Brussels, 23/03/2012 (Agence Europe) - The European Systemic Risk Board (ESRB) believes that against a backdrop of mild recession and an easing of tension on the money markets, the main problem in the European Union is financing for the real economy. Meeting in Frankfurt on Thursday 22 March, the ESRB said it was prepared to draw regulators' attention to the need for corrective action in the event of clear signals emerging of a credit crunch, and listed areas that need to be monitored - the deleveraging and recapitalisation of banks; use of the two long-term refinancing operations (totalling nearly €1 trillion) by the ECB to provide cash for banks; pursuit of budget consolidation and structural reforms in the member states and implementation of the budget pact signed by 25 nations earlier this month; and the establishment of credible firewalls to prevent any spread of risk.
CRD IV. The ESRB will soon be sending a letter to the European legislator setting out its views on the macroeconomic aspects of the current review of EU rules to increase banks' funding requirements (the CRD IV directive). The letter will discuss public authorities' flexibility when it comes to macroprudential policies. (MB/transl.fl)