By William L. Watts
FRANKFURT (MarketWatch) -- The euro zone needs a new "fiscal compact" that would "enshrine" budget rules and address the fundamental shortcomings that are at the heart of the region's debt crisis, European Central Bank President Mario Draghi said Thursday in remarks prepared for delivery to the European Parliament in Brussels. "We might be asked whether a new fiscal compact would be enough to stabilize markets and how a credible longer-term vision can be helpful in the short term," he said. "Our answer is that it is definitely the most important element to start restoring credibility." Draghi also said the ECB is aware of the "continuing difficulties" faced by banks due to stress on sovereign bonds, tight funding markets and the scarcity of eligible collateral in some financial segments.
