ROME Oct 1 The serious problem of banks that
have become too dependent on liquidity provided by the European
Central Bank must be resolved by national authorities and not by
the ECB, Governing Council member Mario Draghi said on Friday.
Speaking at a conference in Rome, Draghi warned that many
euro zone banks are much weaker than appears from their balance
sheets because the very low level of interest rates understates
the worsening of their financial situation.
"The problem of addicted banks should not be addressed by
the ECB but by financial authorities," Draghi said.
He added that unless the problem is resolved "we will have
these zombie banks in the euro area for some time".
In other remarks, Draghi said that in judging when to
withdraw its emergency measures to help markets, the ECB must
avoid the risk of leaving too much liquidity for too long, which
could sow the seeds of a future crisis.
On the other hand the ECB is bearing in mind that the
situation of the real economy has "improved but remains