Non-systemically important banks are Europe’s “real” problem - and that is why even the smallest bank in the euro zone must be under European Central Bank (ECB) supervision, Michel Barnier, the European Commissioner for Internal Market and Services, told CNBC.
CNBC content made available by kind permission of CNBC
By: Katy Barnato Assistant Editor, CNBC
Speaking on Monday at the Ambrosetti Forum, an annual international conference held on the shores of Lake Como in Italy, Barnier rejected German Finance Minister Wolfgang Schaeuble’s view that the ECB should focus only on the euro zone’s largest banks.
Barnier named U.K. bank Northern Rock, Spain’s Bankia and Franco-Belgian Dexia as “non-systemic” banks that still cause “real problems.”
“They aren’t systemic banks, and it is they who pose the problems today,” he said. “Therefore, for a single supervision to be effective and credible, it must have the right to look at each of these situations, in each bank.”
He added: “We should draw on the lessons from the crisis in order that no financiers, no financial products, no financial sectors, have the right to escape from effective regulations, from an effective supervisory mechanism.”
Barnier said some regulations, such as consumer protection, would remain the domain of national governments rather than the ECB. “It should not occupy itself with the daily running of the banks from Frankfurt… this remains national business.”
On Wednesday, European Commission President Jose Manuel Barroso will detail the Commission’s plan to place all 6,000 euro zone banks under the ECB supervision at his annual state of the union address.
Barnier told CNBC that European Union countries which are not members of the euro zone, such as the U.K., will be allowed to place their banking sectors under ECB supervision if they wish.