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23 April 2024

Banking system remains fragile

Mario Draghi (SUPPLIED)

By Reuters

Bankers should be aware of the fragility of the economic recovery when taking on new risks, the head of the Financial Stability Board (FSB) warned.

Mario Draghi said financial markets were in much better shape than could have been expected a year ago. But much of the improvement was due to extraordinary monetary and fiscal measures, he said, refering 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.

Draghi noted that banks were more inclined to take on risks again.

"Bankers should be aware of the fragilities in the system," he said. "They should have in mind that there are many fragile sides to this beginning of the recovery."


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