FRANKFURT Nov 9 Countries and banks alike have
to reform to untangle their interdependence and should not rely
on actions from the European Central Bank or euro zone's rescue
fund to regain investors' trust, a Bundesbank board member said
The negative feedback loop between indebted governments and
troubled banks added to the worsening of the sovereign debt
crisis and plans like the one for a euro zone banking union aim
to weaken this link.
Bundesbank board member Andreas Dombret said in the text of
a speech to be given at a banking conference that economic as
well as balance sheet adjustments and structural reforms were
needed as well.
"Government bond purchases increase dependencies and
firewalls are no substitution for regaining financial solvency
and investor confidence," Dombret said in a text of a speech.
"There is no way around reforms and adjustments," he added.
Dombret reiterated that under a banking union only future
risks could be dealt with jointly, not banks' problems from the
(Reporting by Eva Kuehnen)