Friday, January 27, 2012

ECB's Draghi: liquidity measures avert euro zone crunch

The European Central Bank's loans to banks have averted a major credit crunch but credit remains seriously impaired in parts of the euro area, ECB President Mario Draghi said at the World Economic Forum in Davos on Friday.

Draghi said it was not yet clear whether the cash the ECB has pumped into the banking sector was filtering through to companies and consumers.

"So we know for sure that we have avoided a major, major credit crunch, a major funding crisis," he said.

"Do we know that actually this money is going to finance the real economy? We don't have evidence of this yet. We have to wait. There is a lag. In the meantime, you have parts of the euro area where credit is more or less normal. You have areas where credit is seriously impaired."