Addressing a conference in Slovenia, governor of the Bank of Greece Yannis Stournaras said that an economic recovery without bank credit would not offer the maximum result encouraging indirectly the banks to start offering credit.

He mentioned that history has shown that in such a case economic recovery was on average weaker than if bank credit was accompanied.

Stournaras stressed that creation of a Banking Union would restore confidence in the banking sector, while the review results of a pan-European stress test would play an important role in improving confidence in the banking sector.

He also noted that a Banking Union would also contribute in reducing the fragmentation of financial markets.

“The sooner banks restructure their balance sheets, the easier they will regain confidence among private investors, attracting new capital and offer credit to the economy,” Mr. Stournaras said.

He also presented a series for the development of asset-backed security market.