FRANKFURT (MNI) – Future supervision of Eurozone banks should be
based within the European Central Bank but must be independent, ECB
Governing Council member Erkki Liikanen said on Wednesday at an
ECB-sponsored conference here.
The independence of banking supervision from the ECB’s monetary
policy function is fundamental, Liikanen said. Strict separation is
needed to avoid any conflict of interest with monetary policy setting
while ensuring the ECB’s independence and the proper accountability of
the bank regulation arm.
The goal of achieving such independence could be complicated. A
recent legal opinion by the EU council said it would not be in keeping
with the EU treaty for a body inside the ECB to bypass the Governing
Council, since the Council is required to sign off on all policy
decisions emanating from the ECB.
Liikanen, who authored a report issuing recommendations on how to
reform the European banking sector in the wake of the financial crisis,
argued that in terms of communication strategy, ECB President Mario
Draghi should not speak about possible banking sector troubles after the
new supervisory body is operational.
Liikanen said that a solution must be found to allow non-Eurozone
members to participate in a banking union. That, too, could be tricky.
The legal opinion from the EU Council suggested that under current EU
law, non-EMU members could not have decision-making authority within the
ECB.
–Frankfurt bureau tel.: +49-69-720 142 Email: jtreeck@mni-new.com
[TOPICS: MT$$$$,M$X$$$,M$$EC$,MGX$$$,MFGBU$,M$$CR$]
