benoit cœure : interview with cnbc interview with mr benoit cœure, member of the executive board of the european central bank, and cnbc, conducted by mr steve sedgwick on 6 april 2018. * * * you've been talking about trade and that is the key topic here in cernobbio and indeed globally at the moment as well. what's your contribution this morning on this topic? the point i was making this morning at the conference is that first we're not sure yet that we're in a trade war. as much as possible, if we could avoid the bellicose semantics and come back to a reasonable discussion, that would help for economic confidence. that also means that if this would morph into a full - fledged trade war, this has the potential to have quite damaging consequences for growth and jobs globally, including in the us. is it already having ramifications in global financial markets? we've seen the volatility and equity markets. we've seen higher borrowing costs as well. it looks like it's already having the effects of a trade war without being a trade war yet. to some extent, yes, we've seen that. we've seen obviously stock prices going down, some risk premia are going up, so some tightening of financial conditions globally starting with the us. but it all depends on how the situation will evolve. certainly what we don't want to see is a general tightening of financial conditions. in terms of the effect it's going to have on rate raising on both sides of the atlantic, what do you see as the ramifications for interest rate policy first perhaps for federal reserve and then for the ecb? for the federal reserve i wouldn't dare comment. i don't think they would like it too much and it's not my job. as far as the eurozone is concerned, so far i would say we can look through. it all comes against a backdrop of a very strong growth momentum, very broad. this recovery, this expansion is the strongest we had for at least 10 years. in terms of its breadth across the board, across sectors, across economies, that's the broadest we had for the last 20 years, i would say. the starting point is a very good one and the economy is quite resilient. there are two reasons why bonds go up, why yields go up or the rates on

- reaching reform since the creation of the euro. 3. main features of the ssm regulation the single supervisory mechanism is to become operational in 2014. let me briefly highlight its main features. ssm as one system the ssm will operate as a system, catering for all expertise of national supervisors and at the same time possessing a strong decision - making centre. this will ensure close proximity with the supervised entities and cross - border consistency. appropriate decentralisation procedures will be defined while preserving the unity of the supervisory system and avoiding duplication. as regards the scope of the banks to fall under the ssm, the proposal is very clear. all banks established in the euro area will fall under the remit of the ssm. this approximates to around 6000 banks. the fact that all banks in participating member states fall under the scope of the proposal, does not imply that the ecb will conduct direct supervision of all banks. although the ecb will be ultimately responsible in the conduct of its supervisory function, the ecb will be assisted by national supervisory authorities – the system will be very much decentralised. national supervisors have the knowledge of local and regional markets and have a long - established expertise in supervision. nevertheless, what ensures that the ssm is really one system are the regulation dispositions that state that the ecb will issue guidelines and will define the framework for conducting supervision by all systems'd. schoenmaker, ( 2011 ), “ the financial trilemma ”, economic letters, no. 111. bis central bankers ’ speeches components and, most important, that the ecb will have the power to centralise the supervision of any bank or group of banks when it recognises the need to do so. the proposed regulation stipulates the thresholds that will define the significant banks that will fall under more direct ecb supervision. in addition, the ecb may also on its own initiative consider an institution to be of significant relevance and thus decide to exercise direct supervision. based on a preliminary assessment, the ecb will conduct direct supervision of approximately 150 banks, representing around 80 % of the banking sector in europe. extensive powers of the ssm a second important feature of the ssm regards its extensive powers in the conduct of its supervisory function. the ssm, with the ecb at its centre, is entrusted with an extensive set of micro - and macro prudential powers, covering all key tasks relating to the prudential supervision of credit institutions. the