Draghi hails 'great progress' after banking union deal

European Central Bank (ECB) President Mario Draghi hailed the "great progress" made "for a better banking union" on Thursday, after the European Union agreed to complete the region's banking union.
Negotiators agreed to create a new agency to shut euro zone banks that are too weak to survive and a fund to help cover the costs, according to a draft agreement.
All-night talks ended a stand-off between the European Parliament and euro zone countries over the new scheme, completing the second leg of banking union after supervision by the ECB.
"It's a very good agreement, its progress...We need a mechanism which is properly funded and the agreement actually improves on the pre-existing funding, and it's also a clear reference to enhanced borrowing capacity from the market by the fund," Draghi told CNBC on Thursday.
"The decision-making mechanism is also swifter and more operational so it's an improvement on that front too."
Chris Ratcliffe | Bloomberg via Getty Images
Mario Draghi, president of the European Central Bank (ECB)
The details of the compromise are outlined in a draft agreement and were confirmed by people involved in the talks. 
Under the compromise reached, a fund made up by levies on banks will be built up over eight years, rather than 10 as originally envisaged. It will also be possible for countries to share 40 percent of the fund from its first year.
The deal also envisages giving the European Central Bank the primary role in triggering the closure of a bank, making it harder for the new 'resolution' agency to do so and limiting the scope for country ministers to challenge such a move.

Aussie dollar resilience: Here today, gone tomorrow?

The Australian dollar has remained surprisingly stable this week amid volatile headlines from China and declining commodity prices but analysts are divided over whether this stability will last.
Australian assets are particularly vulnerable to economic swings in China– its largest trading partner – but fears over the strain on Beijing's financial system following two reports of corporate debt defaults and a tumbling yuan have yet to take their toll on the Australian dollar.
Furthermore, copper prices were on track to close out the week not far from three-and-a-half year lows. Exports of the metal bring in about $6 billion a year for Australia, making it a key commodity export with China representing one of the metal's top consumers.
The Aussie has managed to trade above 90 U.S. cents for a seventh straight session, rising to a three-month peak of $0.9137 on Wednesday.
"I don't expect anything below 7 percent for Chinese [gross domestic product] growth and I think that in terms of commodity prices, Australia doesn't have much to worry about, so 90 [cents per dollar] is a fair price," Michael Woolfolk, managing director and senior currency strategist at BNY Mellon told CNBC Asia's "Squawk Box."
"We're still several steps back now from our worst case scenarios in regards to growth expectations for the U.S. and China, so things look like they will improve from a couple weeks ago, which will be positive for the Aussie dollar," he continued.
But not everyone is as positive.
"I still think the China story is going to overshadow the Australian dollar. That story is still unfolding, there are a lot more chapters to be written and they may not have a happy ending. That could dampen any enthusiasm for the Aussie going forward," Michael Every head of financial markets Rabobank in Hong Kong told CNBC on Thursday.
Hamish Pepper, forex strategist, Asia Pacific at Barclays, also remains bearish, citing a target of 88 U.S. cents in the next three months.

Ukraine crisis gives new impetus to EU-U.S. trade talks, U.S. says

Russia's annexation of Crimea underlines the need for the United States and the European Union to deepen their economic ties via an ambitious trade deal that would also allow Europe to import U.S. gas, Washington's top trade official said on Saturday.
Days before U.S. President Barack Obama and EU officials hold a summit in Brussels, U.S. Trade Representative Michael Froman said the rationale "could never be stronger" for a U.S.-EU free-trade pact, despite growing public hostility to it.
"Right now, as we look around the world, there is a powerful reason for Europe and the United States to come together to demonstrate that they can take their relationship to a new level," Froman told reporters.
"Recent developments just underscore the importance of the transatlantic relationship. "From both a strategic and economic perspective, the rationale for the T-TIP could never be stronger," he said, referring to the proposed accord's official name, the Transatlantic Trade and Investment Partnership.
Getty Images
President Barack Obama gives a statement on the situation in the Ukraine in the Brady Press Briefing Room of the White House on March 17, 2014 in Washington, DC.
Brussels and Washington say a trade pact encompassing almost half the world's economy could generate $100 billion in additional economic output a year on both sides of the Atlantic, as well as creating a market of 800 million consumers.
But since talks were launched eight months ago, reports of U.S. spying in Europe and accusations that an accord would pander to big companies have combined to erode public support.
Moscow's seizure of the Crimea region from Ukraine and Europe's reliance on Russian energy have focused minds across Europe about the need for stronger ties with the United States, while European Trade Commissioner Karel De Gucht warned that Russia was no longer a reliable partner.
"We should have a very clear idea of what Russia is doing by annexing Crimea. It doesn't have a place in normal international relations," De Gucht later told a conference alongside Froman.
"Do we have to swallow that? I think there is a price for that and I think we should be very clear, the EU and the United States together, that they (Russia) simply cannot do this," he said, although he declined to say if he backed a trade embargo.
Rethinking relations with Moscow
EU leaders dedicated a summit in Brussels on Thursday and Friday to rethinking relations with Moscow and accelerating their quest to reduce the bloc's reliance on Russian oil and gas, an area where the United States can play a role.
Froman laid out how companies could export U.S. liquefied natural gas (LNG) in tankers to Europe, as France, Germany and Britain seek, benefiting from the U.S. shale gas revolution.
Under U.S. rules, the Department of Energy must issue licenses to exporting companies, but license approval becomes much easier under a free-trade agreement, or FTA.
"Clearly, when the T-TIP is done, assuming it is done, there will be an FTA relationship with the European Union," he said.
Asia is for now a more lucrative export market for U.S. liquefied natural gas, but Froman said it was also up to European companies to decide where gas goes, and that exports did not depend on a transatlantic trade deal.
"Even right now, there have been four or five licenses approved for export to non-FTA countries. There are several European companies who are the contractors," he said, naming France's Total and GDF Suez.
"Where that gas goes is up to them. Conceivably, European governments have an interest in them bringing that gas to Europe," Froman said.
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The Week That Was: Russia annexes Crimea
CNBC's Tyler Mathisen looks back at the week's top business and financial stories. Markets stabilize following Russia's annexation of Crimea. Janet Yellen scared the markets a bit, hinting the Fed could raise interest rates next spring. And GM announced several new recalls.
The European Union's top two officials, Herman Van Rompuy and Jose Manuel Barroso, are expected to press Obama on the issue of energy on Wednesday when they meet in Brussels.
De Gucht said it was in the United States' interest that Europe should become less reliant on energy from Russia. "That's why I think we should have an ambitious chapter on energy in the T-TIP," he said, referring to EU demands for a clear framework setting out U.S. commitments on gas exports.
Beyond Ukraine, other difficult issues include how to open up to each other's markets, removing barriers to business and customs duties that cost companies billions of dollars each year, particularly automakers such as Ford, General Motors and Volkswagen.
Washington and Brussels are at odds over an initial exchange of offers to open up markets and cut tariffs, with each saying the other has not been ambitious enough.
"We reaffirm that the goal of negotiations should be elimination of all tariffs. We would welcome Europe reaffirming that goal," Froman said.
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