- ECB trying to ‘lower the problem’ of blocked channel.
- ECB’s OMT will only work if doesn’t fan moral hazard.
- ECB’s OMT program requires strong conditionality.
- Says ECB cannot accept monetary policy channel is blocked.
- Europe needs a unified banking system, capacity to step in without involvement of individual member states.
- European banking union important to break link between sovereign risk and banking system.
- Says aid program stops if country goes off track.
- Says bank resolution much less costly than recapitalization.
“The project of a banking union is so important in the euro zone because if we want to break the link between sovereign (risk) and the banks, we need to transform the banking system into a euro-zone banking system.
“We of course need a unified banking system … we need to have the capacity to step in without the involvement of individual member states.”-rtrs
