FRANKFURT (MNI) – The banking union envisaged in Europe is not the
way out of the crisis even if it could play a positive role, European
Central Bank Governing Council member Jens Weidmann said in an opinion
piece published Friday.
Weidmann wrote in German business daily Handelsblatt that “properly
designed, a banking union will in the future strengthen a
stability-oriented currency union.”
“However, for resolving the current crisis, it is the wrong means,”
he continued. “Legacy risks should, as up to now, continue to be borne
by the member states under whose responsibility these developed.”
Anything else, he affirmed, could delay efforts by member countries
to repair their own banking sectors in favor of a possible mutualization
of losses.
“Moreover,” the Bundesbank head wrote, “a multitude of central
design questions are still open,” in which context he cited, among
others, the questions of which institutions are to be supervised; the
basis of the banking union in EU law; the treatment of EU members not in
EMU; and the voting modalities of the supervisory board, where he
expressed support for a weighting system.
“In introducing the banking union, thoroughness has to come before
quickness,” he said. “There is no sense in building a new supporting
pillar quickly, but on sand.”
In his article, Weidmann said the “vicious circle” between
sovereign debt creditworthiness and the banks had to be broken.
–Frankfurt bureau tel.: +49-69-720142. Email: dbarwick@mni-news.com
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