PARIS (MNI) – The planned single banking supervisor in Europe
should be responsible for all banks in the Eurozone and as many banks
from non-Eurozone EU states as possible, European Central Bank Executive
Board member Benoit Coeure said Monday.
Speaking in Brussels, Coeure said that should the supervisor’s
reach be limited to just a group of banks, “a two-tier system would
result in an uneven playing field, effectively segmenting the banking
sector, which is precisely what we are trying to repair.”
Coeure also said that while banking union was necessary for the
Eurozone, it was also “desirable” for the 27-state European union.
“The participation of additional [EU] member states is welcome and
would strengthen the single market,” Coeure said, adding that work was
underway to address the concerns of non-EMU states, who fear that they
might not have sufficient input into the decision making of a bank
supervisory body run by the ECB.
Coeure said that a fully-fledged banking union with a resolution
plan for sick banks and deposit insurance implied a fiscal union in
which certain risks were shared among member states.
“Shocks cannot entirely be absorbed by national policies alone,
given the constraints imposed by the single monetary policy and the lack
of an exchange rate,” Coeure said. “Therefore, there has to be a euro
area fiscal capacity, as a form of limited rainy day insurance.”
But he warned that any fiscal union must by “precisely delineated”
so that it does not “mutate into a transfer union.”
Coeure said that “transferring resources permanently from core to
peripheral countries would be tantamount to accepting that economies
will not adjust and that countries will not find their way back in the
global economy.”
–Paris newsroom, +33142715540; jduffy@marketnews.com
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