by the banks, and only lastly and exceptionally by taxpayers. we should create this mechanism swiftly, otherwise the banking union will be incomplete. and even then, the banking union must not act as a cover for shifting responsibility for problematic legacy assets in individual countries to the european level. the problematic assets which are currently stuck on bank balance sheets stem from unhealthy developments at national level and the mistakes of national supervisors, and should therefore be borne by the owners and creditors of the relevant banks or by taxpayers in the country concerned. does it make sense for the ecb to have responsibility only for banks with total assets of €30 billion and above? it is certainly a clear criterion which enables those banks subject to single supervision to be separated out easily from the others. however, a somewhat smaller number of banks could have been covered than the 200 which are planned. after all, according to the plans, the ecb can extend its supervision to smaller institutions anyway if it deems this necessary. the compromise is a first step towards a european banking union. is the next step a joint deposit insurance scheme, in which german savers will be liable for spanish banks? no. as i mentioned, the next step is a recovery and resolution mechanism. i do not think a deposit insurance scheme is necessary. adding a further element of liability would require considerably greater powers of intervention in member states ’ fiscal and economic policies. is it not unfair that banks have higher refinancing costs just because they come from a country with unsound government finances? just as fair or unfair as higher car insurance premiums if you live in a region with a large number of accidents. the reality is that we have differing government solvency risks. the fact that sovereign solvency and national economic performance are also reflected in banks ’ balance sheets and refinancing costs is not a dysfunction, it is plain logic. the conclusion we draw from this must not be that these risks need to be negated or spread across the whole of europe, but that states need to be forced to stick to the rules, to ensure they have sound finances and to restore their economy ’ s competitiveness. it is the causes of the solvency spreads that need to be tackled, not the symptoms which are reflected in banks ’ balance sheets. other countries will soon be joining the euro, then the national representatives will start rotating on the ecb governing council. at some point, germany will not be at the table when decisions are made. i regard such

what is the use of a chinese wall on floors five to twelve, if the monetary policymakers and bank supervisors have lunch together in the same canteen? the exchange of opinions between specialists and the bundling of expertise are wholly desirable. that is why the bundesbank is part of the german banking supervisory framework. the problem does not arise potentially until one body is making binding decisions for two areas of responsibility. in this respect, germany ’ s dual system has its advantages, in that the bundesbank undertakes ongoing supervision while bafin in bonn makes sovereign decisions. so you do not want the ecb to decide that a bank should be wound up. this bundling of responsibilities has been decided on for the time being, we now need to minimise conflicts of interest. as an organisation which is already up and running, the ecb could act as a midwife for the supervisory set - up. but i would like the current construct, in which final responsibility lies with the ecb governing council, to be no more than a transitional solution. banking supervision should be transferred to an entirely independent body to make the decisions. this is the only way that doubts about the independence of the ecb governing council in its monetary policy decisions can be dispelled. the french wanted to get going with the single european supervisor at the beginning of next year. now march 2014 has been agreed. is that enough time to create a functioning supervisory set - up with sufficient staff? it is certainly an ambitious timetable. the practical requirements placed on a supervisory set - up should not be underestimated, even if it will initially cover only the large, systemically important institutions. supervisors have to be familiar with the language, the legal regimes, the corporate structures and the particular features of the national markets. and, of course, they also need to bring with them a great deal of experience in banking supervision. therefore, supervision of the systemically important institutions, too, can only succeed if the present national supervisors are heavily involved. bis central bankers ’ speeches what will happen if the european supervisors find that a bank requires additional capital? then the bank will have to obtain the capital. if it is not able to do so, it will have to be restructured or wound up. it is for such cases that we need a recovery and resolution mechanism at european level financed by the banks. such a mechanism has to ensure that liability is borne first by the banks ’ shareholders, then by other creditors, then by a fund financed