The euro zone will need “a strong effort” from all its policy makers to overcome the recent “significant challenges”, the head of the European Central Bank, Mario Draghi, told the European Parliament’s Economic and Monetary Affairs Committee.

“The situation in the banking sector now is very different from what it was in 2012,” Mr. Draghi said. “Perhaps most importantly, euro area banks have significantly strengthened their capital positions over the past few years, notably as a consequence of the Comprehensive Assessment conducted in 2014.”

However, he said that “some parts of the banking sector in the euro area still face a number of challenges. These range from uncertainty about litigation and restructuring costs in a number of banks to working through a stock of legacy assets, particularly in the countries most affected by the financial crisis”.

Mr. Draghi said the ECB was ready to do its part but also called on governments to help stressing “It is becoming clearer and clearer that fiscal policies should support the economic recovery through public investment and lower taxation.”