European banks remain vulnerable

TALLINN - European banks remain vulnerable and the region's governments need to continue with austerity measures to overcome their debt crisis, the Estonian Central Bank said in a statement.

The causes of the debt crisis haven't disappeared, even as the long-term refinancing operations of the European Central Bank have 'somewhat' eased the tensions in financial markets at the beginning of the year, the Tallinn-based Eesti Pank said in an e-mailed statement today.

"The partly fragile European banking sector and a weak economic growth outlook show that Europe's financial system remains vulnerable and the debt crisis is not over," the bank said.

"Thus the governments in the euro area need to continue reforms and budget consolidation necessary for solving the crisis as the long-term loans offered to banks by the euro system is a temporary measure.”