ZURICH (MNI) – Debt restructuring by some Eurozone governments
could increase pressure on others, but it remains a very unlikely
scenario, according to European Central Bank Governing Council member
Yves Mersch.
Asked by the Swiss economics magazine Bilanz whether European banks
could survive a triple-blow restructuring by Greece, Ireland and
Portugal, the governor of the Luxembourg central bank acknowledged that
it would be a “severe blow for many banks, especially given the risk of
contagion.”
“However, I see this scenario as extremely unlikely,” he added.
“The banking world has become much more resilient as a result of
recent recapitalizations,” Mersch noted. “Today it could withstand a
crisis much better.”
The results of new stress tests to be published at the end of June
should provide a better picture of the state of the European banking
system, he added.
[TOPICS: M$$CR$,MGX$$$,M$$EC$,M$X$$$]
