Germany's Dombret believes Brexit to be manageable for banks but preparation needed
Bundesbank executive board member Dombret in a prepared speech 15 May
- risk of sovereign default may be low, but not zero
Speech at the Annual Conference on the Banking Union entitled "The other side of the coin - Why European supervision needs international regulation"
Full speech here where he concludes:
"I have listed several organisational challenges which the SSM will need to come to terms with, if it is to live up to its character as a network.
- National authorities need to honour their staffing commitments, because these are what drives the operational functioning of theSSM.
- We need to remove boundaries between supervisors in their daily routines with a view to nurturing a "one-team" culture.
- We need to enhance our language skills to account for the cultural diversity that is part and parcel of life in Europe.
But the SSM- whether it runs smoothly or is still in need of improvement - is not a universal remedy for home bias and the nexus between banks and their home sovereigns in the euro area. Only if they are flanked by a coherent set of rules for the banking sector will theSSMand the banking union as a whole be in a position to perform to our fullest satisfaction.
Putting an end to the privileges afforded to sovereign risk at banks will be a milestone. It is one thing to agree on all the components of a consistent regulatory framework - how quickly that aim can be achieved in the face of political pressure, is another. Let us find answers to both these questions."
Meanwhile EURUSD pushing higher still and chewing through 1.0950 offers/res. Large expiries rolling off there today at 14.00 GMT which should help contain.