Europe-wide Supervision for Stronger Banks
![Europe-wide Supervision for Stronger Banks](https://www.xbrl.org/wp-content/uploads/2018/09/eu-620x349.jpg)
President of the European Central Bank, Mario Draghi, argues that the disjointed nature of national supervision and resolution in Europe in 2008 led to markets fragmenting down national fault lines – with individual nations creating negative spillovers by defending domestic policy at the expense of united efficiency and stability.
Draghi says that a strong banking union and Europe-wide supervision addresses these shortcomings by pooling national financial policies at the EU level. The stronger, more uniform supervision that a Europe-wide framework provides leads to more resilient banks, and more confidence and consistency in cross-border banking.
A system-wide perspective also means supervisors can draw on a comprehensive dataset from across the EU when monitoring and mitigating risks. Cross-border linkages help to address systemic risks, while also providing a comparative assessment that can help identify bank-specific issues early on.
However, Mr Draghi believes that national legislation still stands in the way of a level playing field for banks, leaving the market in Europe fragmented: more efforts are needed to fully reap the benefits of a harmonised, integrated market.
Read the transcript of his speech, given on September 18 at the ACPR Conference on Financial Supervision, in full here.