Regarding the proposal to create a European Systemic Risk Board to warn of potential future crises ahead of time, Trichet said: "it is the right step to set up a body specifically responsible for the macro-prudential oversight at the European level."
The euro area economy shows signs of stabilisation, but it would be premature to declare the crisis over, ECB President Jean-Claude Trichet told the Economics Committee on Monday. MEPs wanted to know how the proposed Systemic Risk Board would work and how to ensure the supply of credit to businesses.
As there are signs of stabilisation, the ECB is expecting to see in the months ahead "a very gradual recovery", but still this expectation remains uncertain, Mr Trichet said, speaking at the first session since the June elections of the quarterly "monetary dialogue" between the European Central Bank President and Parliament's Economic and Monetary Affairs Committee.
Regarding the proposal to create a European Systemic Risk Board to warn of potential future crises ahead of time, Trichet said: "it is the right step to set up a body specifically responsible for the macro-prudential oversight at the European level." The board would have close links with the ECB, he added.
MEPs including José Manuel Garcia Margallo (EPP, ES) and Wolfgang Klinz (ALDE, DE) asked for more details of the role and powers of this Board, and how it would ensure that its recommendations are followed by Member States. Mr Trichet said the role of the council would be to identify risks and give recommendations but not to make decisions in place of other authorities.
Antolin Sanchez Presedo (S&D, ES) was concerned about the situation of small businesses in the wake of the economic crisis, stressing that small and medium enterprises are extremely important in creating jobs. "We are following very carefully what happens there," said the ECB President. He said that focusing the ECB’s ‘non-conventional’ measures on banks was in fact helping SMEs, as they relied principally on banks as a source of credit rather than being able to go direct to the markets.
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