Andreas Dombret, member of the Executive Board of the Deutsche Bundesbank, spoke about the current state of the Single Supervisory Mechanism and the other side of the coin –regulation.
Mr Dombret has listed several organisational challenges which the SSM will need to come to terms with, if it is to live up to its character as a network.
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National authorities need to honour their staffing commitments, because these are what drives the operational functioning of the SSM.
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There is need to remove boundaries between supervisors in their daily routines with a view to nurturing a "one-team" culture.
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There is need to enhance our language skills to account for the cultural diversity that is part and parcel of life in Europe.
But the SSM – whether it runs smoothly or is still in need of improvement – is not a universal remedy for home bias and the nexus between banks and their home sovereigns in the euro area. Only if they are flanked by a coherent set of rules for the banking sector will the SSM and the banking union as a whole be in a position to perform to our fullest satisfaction.
Putting an end to the privileges afforded to sovereign risk at banks will be a milestone. It is one thing to agree on all the components of a consistent regulatory framework – how quickly that aim can be achieved in the face of political pressure, is another.
Full speech
© Deutsche Bundesbank
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