BASEL, Switzerland, Jan 9 (Reuters) - The financial markets are in much better shape than could have been expected a year ago but substantial fragility remains, the head of the Financial Stability Board (FSB) said on Saturday.
Mario Draghi said much of the improvement in the financial system was due to extraordinary monetary and fiscal measures, a reference to the billions of dollars of taxpayer money used to shore up banks and the broader financial system amid the worst crisis since the Great Depression.
'It is true... banks were able to raise capital, their profitability has improved significantly, their liquidity and funding conditions have improved significantly. At the same time, there is very substantial fragility in the system,' said Draghi, who is also governor of the Bank of Italy.
He was speaking at a media briefing following a plenary meeting of the FSB at the Bank for International Settlements in the Swiss city of Basel.
The FSB is made up of senior representatives of national central banks, regulatory and supervisory authorities and ministries of finance, international financial institutions, standard setting bodies, and committees of central bank experts.
The board has been established to address vulnerabilities and to develop and implement strong regulatory, supervisory and other policies in the interest of financial stability.
The FSB has been tasked by the G20 group of countries to make sure that a wide range of new financial regulation is applied consistently across the world. Keywords: BIS/FSB (Zurich newsroom +41.58.306.7336; fax +41.44.251.0476; zurich.newsroom@reuters.com) COPYRIGHT Copyright Thomson Reuters 2010. All rights reserved. The copying, republication or redistribution of Reuters News Content, including by framing or similar means, is expressly prohibited without the prior written consent of Thomson Reuters.
Mario Draghi said much of the improvement in the financial system was due to extraordinary monetary and fiscal measures, a reference to the billions of dollars of taxpayer money used to shore up banks and the broader financial system amid the worst crisis since the Great Depression.
'It is true... banks were able to raise capital, their profitability has improved significantly, their liquidity and funding conditions have improved significantly. At the same time, there is very substantial fragility in the system,' said Draghi, who is also governor of the Bank of Italy.
He was speaking at a media briefing following a plenary meeting of the FSB at the Bank for International Settlements in the Swiss city of Basel.
The FSB is made up of senior representatives of national central banks, regulatory and supervisory authorities and ministries of finance, international financial institutions, standard setting bodies, and committees of central bank experts.
The board has been established to address vulnerabilities and to develop and implement strong regulatory, supervisory and other policies in the interest of financial stability.
The FSB has been tasked by the G20 group of countries to make sure that a wide range of new financial regulation is applied consistently across the world. Keywords: BIS/FSB (Zurich newsroom +41.58.306.7336; fax +41.44.251.0476; zurich.newsroom@reuters.com) COPYRIGHT Copyright Thomson Reuters 2010. All rights reserved. The copying, republication or redistribution of Reuters News Content, including by framing or similar means, is expressly prohibited without the prior written consent of Thomson Reuters.