Banking 'central command' should be priority in Europe
point was made by Adair Turner, chairman of the UK Financial Services Authority, in a London speech yesterday.
"We have got to cut the fatal loop between sovereigns and banks, which will otherwise bring the eurozone project as it exists now, down," he said.
While many ECB governors want to see a banking union, they are also determined that it will not interfere with the central bank's independence. Michel Barnier, the EU's financial services chief, has said officials are working on plans which would make the ECB the supervisor for all banks in the euro area, as well as in other participating EU countries.
Mr Noyer said a supervisory system, with the ECB at its centre, would still have to rely on work done by national supervisors, in the same way that national central banks do much of the work in the ECB.
ECB president Mario Draghi told the European Parliament this month that any plan had to find "exactly the arrangement that preserves independence of monetary policy, doesn't create any conflict of interest and, at the same time, enforces an effective supervisory mechanism.
"If these conditions are not in place then forget about new powers," he said.