* ECB's Draghi says principles of regulation clear
* Commerzbank CEO says role needs further clarification
* German regulator says ECB may be able to veto bank mergers
(Recasts lead, adds quotes)
FRANKFURT, Nov 23 Regulators and lenders called
for more clarity over the European Central Bank's role as
regional banking supervisor as moves to shape its
responsibilities gather momentum.
European Central Bank (ECB) President Mario Draghi told a
banking conference on Friday the creation of a single supervisor
was essential to creating a fiscal union and breaking the
negative relationship between government indebtedness and wobbly
banks that has been dragging down the European economy.
"The single supervisory mechanism should also strengthen the
European market," Draghi said, adding that all EU member states,
even those outside the euro zone should be able to participate.
The ECB was already clear on many of the principles of the
single supervisor but politicians must set out its legal basis
as soon as possible, ideally on Jan. 1, 2013, so preparations
can begin, Draghi said.
But the chief executive of Germany's second-biggest lender,
Commerzbank, said Europe's leaders had yet to make
clear whether the unified supervisor would focus on stabilising
markets or on providing back-door financial transfers to weak
euro zone states.
"Do we want European supervision to be an institution that
truly stabilises our financial system or more as a vehicle for
re-allocation and transfer?" Blessing told an audience of
bankers and regulators at the conference in Frankfurt.
"Funds should be provided to banks only if the ESM/European
supervision has the ability to clamp down and receive ownership
of failed banks," he said, referring to the European Stability
Mechanism, the EU's rescue fund.
Other financial players also pointed to areas where the
single supervisor's role needed to be clarified.
Elke Koenig, president of German financial watchdog BaFin,
said lawmakers and regulators might give the ECB powers to veto
"This is one of the details which is under discussion,
whether this should be one of the tasks of a new European bank
regulator," Koenig said on the margins of the conference.
While European banks are readying themselves for a single
supervisor, they are also mastering a raft of changes to risk
management and bank capital rules known as Basel III and due to
start taking effect on Jan. 1.
European banks and regulators have expressed concern that
the United States may not implement Basel III on time, creating
a distortion in competition between the two regions.
Bundesbank Vice President Sabine Lautenschlaeger said on the
margins of the conference she still expected the United States
to put the new rules into effect on time but warned of
consequences if it did not.
"I they don't join in, we will have to examine what we do
with the U.S. institutions in the euro zone," Lautenschlaeger
told reporters, adding this could lead to stricter supervision
of U.S. banks in Europe.
BaFin's Koenig played down the prospect of such action,
saying the body best tasked with enforcing Basel III rules
globally is the Financial Stability Board.
"It is up to the FSB to present the case to the G20 if this
needs to be discussed. It is up to them to exert pressure."
U.S. banking regulators said earlier this month they did not
expect the Basel III rules, designed to make the global banking
system more resilient in the aftermath of the financial crisis,
to take effect on schedule.
(Reporting by Jonathan Gould and Edward Taylor; Editing by Mark