(Adds further comments from Nowotny, paragraphs 6-12)
BERLIN, Sept 29 European Central Bank Governing
Council member Ewald Nowotny said on Thursday he did not believe
that Europe faced a new banking crisis similar to that seen in
2007 and 2008, but the financial sector was clearly in a
"I wouldn't overdramatize it. We're in a transitional and
learning phase," Nowotny told Reuters before an event hosted by
the Friedrich Ebert Stiftung foundation, when asked about the
concerns triggered by new banking requirements to be finalised
by the end of the year.
He said financial institutions would have to learn to deal
with the new requirements, adding that the changes made sense
and were moving in the right direction.
During the event, Nowotny described as overblown warnings by
some critics that the euro could fail as a currency, and said
the problems were with certain member states.
"I don't see any particular challenges that are remniscent
of the crisis in 2007 and 2008," the Austrian central bank
Nowotny declined to comment specifically on Deutsche Bank
while speaking with Reuters.
Deutsche's U.S.-listed shares hit a record low amid growing
concerns about the bank's stability in the wake of a fine of $14
billion imposed by the U.S. Justice Department over its sale of
He told the event that it was important to consider all the
consequences before letting any financial institution go
bankrupt, noting that such a decision always triggered concerns
about other institutions.
Nowotny said central bankers were still divided over Basel
III banking rules, which are to be completed by the end of the
year, but banks would likely face higher capital requirements.
Selling assets was the quickest way to raise capital, he said.
The Basel Committee made up of regulators from nearly 30
countries has come under intense pressure from the banking
industry and European governments to rein in the reforms it is
The Basel III rules, which are aimed at making the global
banking system more resilient following the 2008 financial
crisis, including forcing banks to hold more and different types
of capital to insulate themselves during downturns.
(Reporting by Reinhard Becker and Andrea Shalal; Editing by
Mark Trevelyan and David Gregorio)