Wind-down worries
The credibility of banking union depends not only on a single supervisory system, but also on a single resolution mechanism, said Mr Draghi, in his opening remarks at his regular quarterly meeting with committee MEPs. "The resolution mechanism cannot be single only in name. It is not possible to have hundreds of people consulting each other about the viability of a bank", he added.
Pressed for specific details of his concerns for the EU bank winding-down system, he stressed that it must be made very clear that the bank supervisor alone should be empowered to assess whether a bank needs to enter the winding-down phase. Asked whether member states should be empowered to veto the activation of a bank wind-down, he replied that this "would not make sense".
Helping the real economy
Various MEPs urged Mr Draghi to do more to help the real economy and especially small and medium enterprises (SMEs). He replied that the ECB was already taking action to help the economy as a whole. He also noted that figures on the flow of credit to enterprises "seem to have stopped worsening" and that "risk aversion in the southern countries is decreasing". These factors should help improve conditions for SMEs, he predicted.
Low inflation risks
MEPs warned Mr Draghi to pay more attention to the low inflation rates, which some warned could herald deflation. "The Eurozone is not facing a Japanese situation", he replied. He nonetheless conceded that low inflation needed to be addressed, pledging that the ECB would "remain accommodative for as long as necessary" and stand ready to deploy further tools to this end.
In the chair: Sharon Bowles (ALDE, UK)
REF. : 20131216IPR31007
