BERLIN (Reuters) – The European Central Bank suffers from a conflict of interests due to its dual responsibilities for setting monetary policy in the euro zone and for supervising banks, ECB policymaker Jens Weidmann said.
“As a banking supervisor, it could find it difficult to be tough with a bank or even wind it down if it knows that, because of its monetary policy measures, it is its biggest creditor,” Weidmann told Germany’s Sueddeutsche Zeitung and other European newspapers.
The Sueddeutsche wrote that he favored spinning off the ECB’s supervisory arm.
On monetary policy, Weidmann, who is also chief of Germany’s Bundesbank, said the ECB “cannot solve all problems”, adding that interest rates should “absolutely not” stay so low for longer than is needed to deliver price stability.
(Reporting by Paul Carrel; Editing by Michael Nienaber)