ECB's Costa says banking union key for struggling countries


The creation of a banking union in Europe is an important step to boost struggling economies like Portugal that have been suffering from the fragmentation of financial markets, European Central Bank governing council member Carlos Costa said on Thursday.

"The creation of a European banking union is very important for the economies, like the Portuguese one, which have been victims of so-called fragmentation," Costa, who is also governor of the Bank of Portugal, told a conference.

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The European Union struck a deal on Thursday to turn the ECB into the bloc's top banking supervisor.

Costa added that Portugal is making progress on its adjustment under an international bailout but it must keep up the effort.

(Reporting By Sergio Goncalves, writing by Axel Bugge)