Central bank funds have not solved problems-Paramo

SANTIAGO, Spain Oct 16 (Reuters) - Steps by central banks to provide funds to cash-strapped institutions have not solved the problems of these entities, European Central Bank Executive Board member Jose Manuel Gonzalez-Paramo said on Thursday.

"It diminishes the illiquidity of the market for solvent institutions, but it doesn't lessen the problem," Gonzalez-Paramo said in a speech on "Liquidity, finances and the economy: the role of central banks".

Government action to improve liquidity gave cause for confidence, he said, although he added it remained to be seen what impact the action would have. (Reporting by Andrew Hay; Editing by Sonya Dowsett)