November 29, 2013 / 9:48 AM / 4 years ago

Euro zone has long way to go in climb out of crisis: ECB's Mersch

FRANKFURT (Reuters) - The euro zone is early on its climb out of economic crisis but it is on the right track, ECB Executive Board member Yves Mersch said on Friday.

Luxemburg Bank Governor Yves Mersch (L), Ireland Bank Governor John Hurley (2nd L), Deutsche Bank Governor Ernst Weletke (front), ECB executive board member Eugenio Domingo Solans (2nd R) and Austrian Central Bank Governor Klaus Liebscher (R) smile during pose for a group picture at the meeting of the ECB Directory Council in Rome April 3, 2003. REUTERS/Pool

“The euro area is early on in the climb out of the crisis. The summit is still far and covered in fog,” Mersch said in the text of a speech for delivery at Frankfurt’s Goethe University.

“Evident pitfalls are between us and the rewarding view from the mountain top. These pitfalls are competitiveness, deleveraging and institutional barriers. But at the same time I believe we are on the right track,” he added.

On the treatment of sovereign bonds by banking supervisors, Mersch said that in the medium term “it makes sense from a prudential point of view that assets are being weighted according to their riskiness and not according to conventions which might not reflect reality.”

But he added that this should be coordinated at an international level by the Basel Committee for Banking Supervision.

Reporting by Sakari Suoninen; Writing by Paul Carrel

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