Schauble warns against excessive zeal on the part of Draghi
Mon 03 Sep 2012
LONDON (SHARECAST) - Speaking on a German radio station on Monday morning, German finance minister Wolfgang Schäuble reiterated his insistence that any Eurozone bank supervisory position created by the European Commission should only oversee systemic-risk banks. He opposed a plan by the European Commission to grant the European Central Bank (ECB) the power to supervise all of the region's banks.
Schäuble also warned against excessive expectations over what can be achieved by monetary policy. “We have to be very careful that we don’t raise false expectations,” Schaeuble said in an interview broadcast by Deutschlandfunk Radio. “It has to remain very clear, state debt can’t be financed through monetary policy. Therefore we can’t have a decision - we would think it very wrong - that’s not covered by the ECB mandate,” he added.
The European Commission is to issue a detailed proposal on a banking supervisor by September 12th. The plan would remove certain authority from national entities, leaving them with routine tasks such as consumer protection.
Last Friday, Schäuble called for a European bank supervisor who is effective and 'not just a facade.' The supervisor should focus on banks with systemic risk, Schäuble wrote in the Financial Times.
Schäuble stated that the bank supervisor to be created by the European Central Bank (ECB) should directly oversee banks that pose a systemic risk Europe-wide. It's "common sense, we cannot expect a European watchdog to supervise directly all of the region's lenders — 6,000 in the Eurozone alone — effectively," Schäuble said.
However, an opposing view was expressed by the European Commissioner for Internal Markets and Services Michel Barnier, who told German daily Suddeutsche Zeitung that all Eurozone banks would gradually come under the oversight of the new common supervisor by 2014.