09 April 2014

Reuters: Lautenschläger says spin-off of ECB bank supervisor not an issue

The vice chair of the ECB's nascent bank supervision arm said on Wednesday that she was not currently focussing on suggestions from some policymakers that the central bank should eventually spin off the new body.

The Single Supervisory Mechanism (SSM), run out of the ECB, is due to take over supervision of eurozone banks in November after conducting a health check of the sector.

Earlier this week, Bundesbank president Jens Weidmann backed a suggestion made by Dutch central bank chief Klaas Knot to make use of the ECB's credibility to establish the SSM before later looking to establish it as a separate institution:

"To avoid potential conflicts of interest between the ECB's mandate to safeguard price stability and its role in banking supervision, changes to the European Treaty will be needed in the medium term in order to strictly segregate these two functions. Klaas Knot said recently in an interview with the German daily "Handelsblatt" that it was sensible to make use of the ECB's credibility to establish the SSM, but that it should be considered to eventually outsource the SSM from the ECB and to establish a separate institution. And I can only agree with his view." (full speech)

But Sabine Lautenschläger, who is the vice chair of the new banking watchdog as well as a member of the ECB's Executive Board, was more focused on getting the new supervisory body up and running: "Please understand if I place all of my attention totally into building the supervision before discussing the separation", she told Reuters on the margins of a banking conference in Berlin.

From November, the ECB will supervise directly around 130 of the euro zone's largest lenders as part of a broader push towards closer integration of Europe's banks that aims to create a more level regional playing field for the sector. The region's other 5,900 or so banks will remain under the brief of national supervisors, though the ECB will have powers to intervene if it deems necessary.

German Finance Minister Wolfgang Schäuble is another policymaker who would like to see the SSM separated from the ECB, though this would require European treaty change.

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