What Draghi’s Remarks Mean for the Euro Area’s Banks

(Bloomberg) -- The euro area’s banks have struggled to restore profitability to levels close to those seen before the global financial crisis and Germany’s banks have had a particularly difficult time. With the woes of Germany’s two largest banks dominating the headlines, the European Central Bank may feel under some pressure to mitigate the effects of its negative interest-rate policy and President Mario Draghi’s comments suggest the Governing Council is taking a closer look at its options. Bloomberg Economics thinks the most likely tool for pain relief is the targeted longer-term refinancing operations.

--With assistance from Niraj Shah (Economist).

To contact the reporters on this story: David Powell (Economist) in London at dpowell24@bloomberg.net;Maeva Cousin (Economist) in Zurich at mcousin3@bloomberg.net

To contact the editors responsible for this story: Zoe Schneeweiss at zschneeweiss@bloomberg.net, Sheldon Reback

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