"Greek crisis makes conflict of interest inside ECB visible"
Danièle Nouy, the chair of the new European banking supervision body under the helm of the European Central Bank, will testify to the ECON committee of the European Parliament this Tuesday. Since the creation of the Single Supervisory Mechanism (SSM) the ECB is responsible both for monetary policy and for banking supervision. “Nouy has to be prepared for some tough questions about conflict of interest inside the ECB,” says cep financial market expert Bert Van Roosebeke. “The Greek crisis has made this conflict visible: The monetary policy setting body of the ECB approves Emergency Liquidity Assistance for Greek banks. In order to be allowed to do this, the supervisory body has to attest that these banks are solvent. The current organization mode inside the ECB, however, does not allow that these matters are really decided by separated bodies.”