‘Bank sector nothing to fear from ECB’

Ireland’s massive banking sector largely located in the Financial Services Centre should not be under threat from the EU that worries about financial institutions sinking sovereign states, according to ECB executive board member Jorg Asmussen.

Regional investment hubs such as in Cyprus require extra supervision to avoid and prevent a build-up of unsustainable banking sectors in the future, warned Economics Commissioner Olli Rehn.

But it was too simplistic to judge the dangers posed by a bank just in relation to the host country’s GDP, Mr Asmussen told members of the European Parliament’s economics committee. The structure of its assets and liabilities must also be considered.