12 May 2014

ECB（欧州中央銀行）ヴィトール・コンスタンシオ副総裁、欧州の統合深化への懐疑論に警鐘、銀行同盟の重要性を強調

By the start of next year, we will have an operational Single Supervisory Mechanism (SSM) and Single Resolution Mechanism (SRM). It is undoubtedly the more important and far reaching reform in the European Union since the creation of the euro. As many other European institutional innovations, the project was born in connection with the crisis management effort of trying to sever the bank-sovereign nexus that was contributing to financial fragmentation. 

The absence of European supervision and resolution had however already been identified by many analysts as an initial design flaw of monetary union. The reasoning behind this is the following: with increasing financial integration, pursuing national financial policies will generally not lead to financial stability, because national policies seek to benefit national welfare, while not taking into account externalities of national supervisory practices in other countries. This leads to an under-provision of financial stability as a public good. 

1. A correction of this flaw addresses the first objective of Banking Union.
2. A second objective for Banking Union stems from the evidence that keeping supervision at national level in both creditor and debtor countries contributed to the large imbalances that developed before the crisis. Without unified supervision, it was impossible to contain the build-up of such imbalances in the pre-crisis period. 
3. A third objective of the Banking Union is the contribution it can provide to financial integration, by separating banks’ robustness from sovereigns and consequently reduce markets’ fragmentation.
4. The fourth objective is closely connected with the third one. Imperfect financial integration in a currency union directly complicates the task of the central bank. It becomes harder to achieve a smooth transmission channel of monetary policy and to ensure similar levels of interest rates across countries. Thus, the tendency towards less financial integration induced by both the financial crisis and institutional shortcomings has undesirable effects also for the conduct of monetary policy.
5. A final objective of Banking Union is to increase the efficiency of the banking system which is the dominant source of finance for the European economy. 

The Banking Union complementing Monetary Union will have far-reaching implications for European integration in general as it implies a vast sharing of sovereignty. European construction is still under the grips of the Jean Monnet functional method of integration: at each new reform step, other become logical and pressing. Regarding Banking Union itself, the other element that should complement centralised supervision and bank resolution in a banking union concerns a centralised deposit insurance scheme.

However, we must recognise and confront the fact that the logical steps towards deeper integration that I just mentioned seem to run against what seems to be the mood of many Europeans, on the eve of European Parliament elections. It is true that crises always open the door to discontent and this crisis is not over yet. Some policy-makers seem too complacent in showing a sense of relief because the situation in Europe has stabilised and turned a corner, since economic growth is resuming, even if at incipient level. This sentiment is not shared by public opinion in many countries. It should rather be recognised that adjustment costs across nations and segments of the population could have been more balanced. In this context, it is useful to retain that the legitimacy of Europe has been always much more based on outcomes of growth and prosperity than on values or input legitimacy.

Full speech

© ECB - European Central Bank