November 29, 2018 / 3:14 PM / in 5 months

ECB's Angeloni says recent events make sovereign-bank link more worrying

FILE PHOTO: The headquarters of the European Central Bank (ECB) and the skyline with its financial district are seen in the early evening in Frankfurt, Germany, September 30, 2018. REUTERS/Kai Pfaffenbach/File Photo

MILAN (Reuters) - The link tying the fate of a country’s lenders to state risks within the eurozone is still intact and has become even more worrying in light of recent events, a European Central Bank senior supervisor said.

Addressing a banking conference in Milan, Ignazio Angeloni, who represents the ECB on the EU’s bank supervision board, said the European banking system had failed to integrate due to missing pieces in the infrastructure that was meant to underpin the banking union and flawed regulation.

“The nexus between banking and sovereign risks remain intact ... and some are reluctant to advance (towards a banking union) because they realise that while non performing loans have been reduced sovereign risks are very significant and recent events in some countries make them even more worrying,” he said.

Reporting by Valentina Za, editing by Stephen Jewkes

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