Brussels, February 18 - The new year has begun on a more fiscally stable note, but economic weakness is likely to continue and that demands continued government reforms and other stabilizing measures, European Central Bank President Mario Draghi said Monday. "Available indicators signal further weakness at the beginning of 2013, with domestic demand remaining dampened," Draghi said in a statement before the European Parliament's Committee on Economic and Monetary Affairs. "This is due to weak consumer and investor sentiment and to the necessary balance sheet adjustments in both the public and private sectors. Foreign demand also remains subdued". Later, Draghi also said that Italian banking system has emerged from economic crisis in good shape, but there is still a risk that continued to exposure to a recession-plagued economy will take its toll. "The Italian banking system has proved to be robust despite the crisis, it did not need public re-capitalizations as in other countries," said Draghi. And he maintained the scandals plaguing Italy's third-largest bank, Monte dei Paschi di Siena (MPS), are part of an "isolated case" involving not just poor management but possible criminal activity. MPS, the world's oldest bank, is creaking under the weight of the failed derivatives transactions and alleged corruption which has involved some of the bank's top managers.