Europe's banks are have become less reliant on central bank funding, European Central Bank (ECB) policymaker Ewald Nowotny told CNBC on Wednesday.
"We have seen that banks are taking up less money from the ECB," said Nowotny, who is head of Austria's central bank as well as an ECB governing council member.
"This shows the dependency of the banks on the ECB is decreasing and this is clearly a good sign."
Nowotny also dismissed "currency war" concerns raised on Tuesday after the head of the Eurogroup, Jean-Claude Juncker, said the euro exchange rate was "dangerously high".
"There has been quite a lot of volatility in the exchange rate, within rather small borders. So I would not give too much weight to all of this," said Nowotny.
The euro gained 0.3 percent against the dollar on Nowotny's comments, reaching $1.33, paring losses after Juncker's statement on Tuesday.
Nowotny added that despite signs of economic stabilization, the euro zone could remain in recession in 2013.
"We know that 2013 will be a year of low growth of the euro area, even slightly negative," he said.
Disappointing numbers on Wednesday suggested euro zone consumer demand remains heavily constrained. The European automotive association ACEA posted figures showing demand for new cars in Europe fell to the lowest level since 1995 last month.
(Read More: European Car Sales Plunge in December)
On Tuesday, Germany's Federal Statistics Office estimated its gross domestic product shrunk by 0.5 percent in the fourth quarter, marking a weaker close to 2012 than previously thought.
(Read More: German Economy Slows Sharply as Crisis Hits Home)