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"The Banking Union decided by the EU will strengthen the eurozone and at the same time make the European financial market more stable for the foreseeable future", said Jürgen Fitschen, President of the Association of German Banks, on the occasion of the IMF/World Bank annual meeting in Washington.
But the sequence of steps was crucial. "The landmark decision to set up a European supervisory authority was the first step. The authority now has to find its feet in practice." With the challenges ahead in mind, Mr Fitschen hopes the new German government will provide reliable and fair leadership in Europe.
The aim was a single European resolution fund, as there should be no double burden for banks. "But a European fund shouldn’t be used to clear national legacy debt", he added. This is why the balance sheet assessment already planned by the ECB was essential. Bail-in should also be introduced as a resolution tool "without any national exceptions, if possible – the sooner, the better".
A single European deposit guarantee scheme, on the other hand, would be premature at the present stage. "The basic conditions for it have simply not yet been fulfilled. This is the unanimous view in Germany, whether of policymakers, bankers, supervisors or the Bundesbank", Mr Fitschen said.
The crises in recent years had shown how necessary regulation was, yet legislation had to be inherently consistent. “So it is all the more important to coordinate rules – not only in Europe”, Mr Fitschen argued. He wanted supervisory rules based on internationally agreed principles that Europe and the US mutually recognised.