MILAN - Euro zone banks do not have any liquidity or capital problems, Italian central bank governor and European Central Bank (ECB) governing council member Ignazio Visco said on Monday.
Speaking at an event in Milan amid market jitters linked to the rescue of Credit Suisse, Visco said the euro area financial system was not directly exposed, but faces a contagion threat.
Visco said regulators have all the tools to face any liquidity issues that may arise, but added that the euro zone needs a deposit protection tool like the one the United States has.
The Italian central banker also said that achieving the expectation that euro area inflation will fall back to its 2% target must be a "polar star" for the ECB.
(Reporting by Valentina Za, writing by Alvise Armellini, editing by Gavin Jones)