VIENNA (MNI) – The European Commission’s plan for centralized bank
supervision in the Eurozone is “right in principle and can improve the
situation” in Europe, European Central Bank Governing Council member
Ewald Nowotny said Thursday.
“But we have to be clear that this will entail a lot of
requirements and that financial resources will have to be provided to
set it up,” Nowotny, who heads the Austrian National Bank, said at a
conference on banking supervision here.
The European Commission on Tuesday unveiled its proposal for common
bank regulation in the euro area, the cornerstone of an ambitious plan
for an eventual financial union, which EU leaders endorsed earlier this
year. The Commission’s plan, as expected, foresees the ECB as the new
regulator, in close collaboration with its constituent national central
banks. All banks operating in the Eurozone countries would fall within
the ECB’s domain, not just the large, systemically important ones.
Nowotny said that in taking on this new role, the ECB must be
careful to assume only “responsibilities which it can fulfill fully and
realistically.” And, he added, it has to be “clear on the requirements
and costs.”
Asked whether he saw a potential problem of a divide in Europe
between peripheral and core countries, the Austrian central bank chief
replied that “this exists already” with “some countries having actively
chosen not to join the euro.”
He added that, “it will be important for the Eurozone to be a
center of stability in Europe,” and to reach that goal, “common banking
supervision can help.”
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