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ECB's Nouy Says Financial System Better Equipped To Deal With Another Crisis

Global financial system is now better prepared to face another crisis, if and when it occurs, Chair of the Supervisory Board of the European Central Bank Daniele Nouy said.

"All of the work that has been going on over the past ten years [since the fall of Lehman Brothers] is aimed at making a new crisis less likely to happen, as well as at softening its impact as much as possible if it does," Nouy told the French newspaper Les Echos during an interview on September 3, the text of which was published Wednesday on the ECB website.

"The objective is also to put the necessary tools in place to deal with the difficulties we will face in an orderly way so as to reduce the impact on other financial players and on the economy."

Banks are better capitalized and the rules on liquidity have been tightened and the new securitizations are far more reasonable, she noted.

"We were able to secure tighter rules - through the Basel III accord and the new accounting standards, which we supervisors had long been calling for," Nouy added.

The top ECB official also said that some banks were not earning the cost of their capital and that was not a tenable situation in the long term.

by RTTNews Staff Writer

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