ECB should separate monetary and supervisory decision makers: Bundesbank

The European Central Bank should have separate decision-making bodies for monetary policy and banking supervision as the current set-up could lead to conflicts of interest, the deputy president of Germany's Bundesbank said on Thursday. 

PHOTO: AFP

FEB 4, 20168:45 PM

[FRANKFURT] The European Central Bank should have separate decision-making bodies for monetary policy and banking supervision as the current set-up could lead to conflicts of interest, the deputy president of Germany's Bundesbank said on Thursday.

"The ECB's Governing Council, for instance, is the ultimate decision making body for both, monetary policy and supervisory decisions," Claudia Buch, who sits in on governing council meetings, said in remarks prepared for a speech. "A clear separation of the ECB's responsibilities for banking supervision and monetary policy would be desirable."

Buch also called for a simplification of the rules governing the participation of the European Commission and the Council in the decision-making process of the Single Resolution Mechanism for winding up failed banks.

She said the current institutional framework is vulnerable to possible conflicts of interest but acknowledged that any change would require modifying primary European Union law.

REUTERS