European Central Bank President Mario Draghi said any future role the institution might play in supervising euro-area banks must not endanger its independence.
“The European Council, with the decision on unified banking supervision in the euro area, has made a very, very important step toward the creation of what one would call a financial markets union,” Draghi said at the ECB’s monthly press conference in Frankfurt yesterday. “Whatever the proposal is going to be, the ECB should be placed in a way to carry out the future tasks in an effective, rigorous and independent way - - without risks for its reputation.”
Europe’s political leaders, meeting in Brussels last week, agreed to design a blueprint for the future of monetary union by the end of the year that could include better controls on national budgets and moves toward joint borrowing as well as centralized bank oversight in which the ECB would play a role. The treaty governing the euro already foresees the ECB supervising banks, should all members of the area agree.
“Any new tasks in the supervisory area should be rigorously separated from monetary policy tasks,” Draghi said. “There should be no contamination between the two areas and we’ll certainly find ways to make sure that this is so.”
Draghi said the ECB’s Governing Council started discussions about the future role, which would imply higher levels of democratic accountability, and that it is “essential” that national regulators form part of the supervisory structure.
“I myself have been a supervisor for six years, being the governor of Banca d’Italia, where supervision is within the bank,” Draghi said. “So I know only too well that the knowledge, the skills, the competence, the history, and the traditions are at national level.”