ECB Tumpel-Gugerell - The role of central banks for banking supervision

08 September 2008

The financial turmoil has evidenced the need for strengthening the macro-prudential dimension of regulation and supervision and confirmed the importance of a strong interaction between central banks and banking supervisors, Tumpel-Gugerell said.

The current financial turmoil has evidenced the need for strengthening the macro-prudential dimension of regulation and supervision and confirmed the importance of a strong interaction between central banks and banking supervisors, ECB Executive Board member Gertrude Tumpel-Gugerell said.

 

“There is no optimal arrangement for the organisation of supervision at the national level”, she explained the ECB position. “Regardless of the model, it is important that there exists a very close and smooth interplay between the central banking and the supervisory function.”

 

The ‘interplay’ between the authorities should be reinforced in the following areas:

• The monitoring and assessing risks to financial stability: Communication needs to go both ways - from the central bank to supervisors and vice versa within the respective legal framework.
• The area of liquidity: Central banks access to information on banks’ liquidity contingency planning funds would be useful. At the same time, supervisors would benefit from information available at central banks stemming from their role in the money markets.
• Crisis management and resolution: There is a need for close interaction between the two authorities. Provision of Emergency Liquidity Assistance is a clear point in case where central banks need supervisory information for decision-making.

 

 

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