Mersch Says Liquidity Risks Constitute ‘Main Threat’ to System

European Central Bank Governing Council member Yves Mersch said liquidity shortages pose the main risks to the European banking system.

“Liquidity risks together with sovereign and funding risks constitute for the time being the main threats not only to the European banking system but I would say are the main topic of most of our gatherings,” Mersch said in Luxembourg today. “The recent intensification of tensions in the sovereign debt market has led to contagion risk which is of systemic nature,” he added.

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To contact the editor responsible for this story: Christian Vits at cvits@bloomberg.net

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