Both the Wall St Journal and the Economist are calling for this. Right now a Euro bank is chartered . regulated, and insured by a national government. Some governments do a good job (Germany) and others don't (Greece). The idea is to create a European Bank Regulator with power to regulate all Euro banks. This would make banks in shaky countries look stronger and reduce incentives to pull deposits out of shaky countries and put them in Germany.
Probably not a bad idea, especially if you believe in creating a United States of Europe, which a lot of Euros do.
Such a Euro Bank Regulator would have a lot of power. It could set bank capital requirements, set pay of bank officers, set what businesses banks could invest/gamble in. It would audit bank books and manage a Euro Deposit Insurance Corp.
Was I a Euro citizen I'd like to know who will run such a thing. Would this Euro Regulator be answerable to Euro voters? Or would it be a Brussels bureaucrat appointment deal, with lucky bureaucrats serving for life?
Of course the Euro's are often oblivious of such issues. I was in Europe on business back when they were putting the Euro together. None of the Europeans I chatted with at the time had the slightest idea of the power of what they were creating, or any interest in who would control it. None of the Euros understood that the second most important official in America, right behind the president, is the chairman of the Federal Reserve.
I guess I'd be a little more enthusiastic about the idea if I thought there was anyone in Europe smart enough to do a good job running it.
No comments:
Post a Comment