Comment on FT article 2/06
Harmonizing bank capital requirements at EU level may be considered premature but there is, on the other hand a very strong argument for harmonization at Eurozone level, given the role of the ECB in supporting the banking system of the area and its unified monetary policy.
It is high time to unify EMU regulatory/supervisory rules; EMU "national" regulators should not have the power to take decisions that can be affect adversely other EMU Members. The events linked to the current "sovereign debt crisis" demonstrate clearly the close interconnection/interdependence within the EMU banking sector. Within this context it is absurd to insist on maintaining the current approach based on the EU 27 which imposes "equal "powers for 27 regulators and justifies the resistance to the latest Commission initiative.
The controversy demonstrates that the the new regulatory architecture with its 3 overarching "Authorities" is flawed. There should be a single common regulatory/supervisory regime for the Eurozone; only Member States who have retained their full "monetary" sovereignty (i.e. the 10 non EMU participants) should be allowed to set their own standards within the internationally agreed frameworks (Basel III or EU imposed common "minimum" standards").
Brussels, 2nd June 2011
Paul N. Goldschmidt
Director, European Commission (ret); Member of the Thomas More Institute.