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Draghi Says ESM to Recapitalize Banks Once Supervision in Place

European Central Bank President Mario Draghi reiterated that the euro area’s bailout fund won’t be able to take a direct stake in lenders until a single banking supervisory system is established, which may not happen until next year.

Asked by European parliamentarians about the European Stability Mechanism directly recapitalizing banks, Draghi said it “certainly can be done only when the supervision is in place.” He added at the hearing that “it might take some time” and “we certainly want to see something close by the end of this year.”