Frankfurt: Europe's new single banking supervisory system, set up a year ago, is working well, the German central bank said Friday, while also pointing to areas where improvements could still be made.
Cooperation between the national supervisory authorities and Europe's new Single Supervisory Mechanism (SSM) set up within the European Central Bank, "is functioning very well," Bundesbank executive board member Andreas Dombret told a news conference.
The SSM officially started work on November 4, 2014, overseeing some 123 banking groups within the 19-country eurozone.
The aim of the new area-side banking supervisor was to prevent a recurrence of the deep financial crisis of 2008 and 2009.
But the SSM still has to rely on the national supervisory authorities in each country to implement its decisions.
"Of course, it can't be avoided that individual countries invoke their own national interests. But with the large number of people involved, it is becoming increasingly difficult to push through unjustified national interests," Dombret said.
The Bundesbank board member also expressed satisfaction at the fact that banks also had accepted the new system.
"We mustn't forget that a lot has changed for them, too," he said.
Nevertheless, a number of aspects could still be improved, such as the decision-making structures and processes, Dombret said.
The highest levels of management were still bogged down with a large number of routine decisions, he said.
And the legal separation between banking supervision and monetary policy was "still not perfect," and could give rise to potential conflicts of interest, Dombret argued. He also called for more transparency.
