The eurozone’s new chief banking regulator has warned that some of the region’s lenders have no future and should be allowed to die, heralding a far tougher approach to supervision across the currency bloc.
In her first interview since taking charge of the euro area’s new banking overseer, the Single Supervisory Mechanism, Danièle Nouy also signalled she wanted to weaken the link between governments and the bloc’s banks that lies at the core of the region’s crisis by breaking with tradition and demanding lenders hold capital against their sovereign assets.
“One of the biggest lessons of the current crisis is that there is no risk-free asset, so sovereigns are not risk-free assets. That has been demonstrated, so now we have to react,” Mrs Nouy said. “What I would admit is that maybe it’s not the best moment in the middle of the crisis to change the rules – that’s possible. This being said, there is the possibility to do more and some countries are applying stricter rules.”