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ECB's Draghi says SSM can fight localised bubbles

Mario Draghi, President of the European Central Bank
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Mario Draghi, President of the European Central Bank

European Central Bank President Mario Draghi said on Wednesday the new pan-European banking supervisor will be able to prick localized asset bubbles, if necessary.

The Single Supervisory Mechanism (SSM), run out of the ECB, is due to take over supervision of euro zone banks in November after conducting a health check of the sector.

(Read more: Euro soars as Draghi plays down deflation talk)

"The SSM has been designed with the necessary independence to lean against localized booms," Draghi said in a speech at an event organised by the Belgian central bank.

Draghi also said that a future agency to wind down failing banks could face more complicated tasks if there were any doubts about its financial resources.

(Read more: Draghi: Too soon to declare euro zone victory)

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