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Speech by Dr Andreas Dombret, Member of the Executive Board of the Deutsche Bundesbank, at ESE Conference 2015 "Financial supervision in Europe - on the right track?"
4. Unifying national and European perspectives
Where should the SSM go from here? It seems like a natural response to internal frictions to cultivate SSM processes and enhance centralisation. This might be interpreted as a blueprint to overcome frictions with national cultures. One is inclined to question the network character of European banking supervision at large: wouldn't a single authority do a more efficient job? I want to iterate two essential arguments against this reasoning. Instead of a steady path towards more centralised supervision, I am arguing for a balanced mix of centralised stringency and national diversity.
First - and well known to most in the business - good supervision requires us to be close to banks. [..]
Second, we should keep in mind the need for self-control. [...]
5. Conclusion
The SSM has gained a reputation as a tough but fair supervisor. I have argued for the preservation of its network character. In order to retain a power balance, we have to allow for multi-level governance. We should aim for an open-minded leadership that governs the SSM according to supreme aims.
Let me reiterate three important aims and implications.
European integration essentially involves learning to manage diversity. In this respect, the ECB has proved itself to be a prototype for self-awareness and openness. Recent SSM-internal analyses of strengths and weaknesses and organisational changes show that it is not resting on its laurels but rather aiming for long-term success.