PARIS--The French Banking Federation said in a statement published late Friday that the results of the European summit Thursday and Friday are an important step towards ensuring stability in the euro zone and will build investor confidence.
"The FBF welcomes the agreement, which constitutes an important step towards ensuring the stability of the euro zone and restoring the confidence of global investors," the statement said.
The FBF cited the intention to create a unified bank supervisor for the currency bloc by the end of the year, the step to allow bailout mechanisms directly recapitalize banks, and the ability of bailout funds to intervene directly on the secondary bond market.
The FBF also said that the decision not to give the European Stability Mechanism preferred creditor status should reassure private investors. There had been concern that a large public buyer in the bond market with preferred creditor status would dissuade the private sector from buying, pushing them towards the front of the queue to take a hit in the event of a debt restructuring.
The FBF also welcomed the agreement on a pact for growth, while noting that a return to sustainable growth also requires mechanisms for collective decision making and better coordination of budget discipline in the euro zone.
-Write to William Horobin at william.horobin@dowjones.com
(END) Dow Jones Newswires
June 30, 2012 06:52 ET (10:52 GMT)
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