Interview with Jörg Asmussen, Member of the Executive Board of the ECB conducted by Alessandro Merli

But is it too high, is it overvalued, does it worry you?
In nominal terms and in real effective terms, which is more important, it is within the band we have seen for the last ten years. I don't have any specific worry on the exchange rate. It only concerns me as it factors into our inflation forecast.

You are directly involved in the negotiations on the banking union. Single supervision was agreed, but on single resolution there are still wide differences. Time is running short, because of the end of the legislative term of the European Parliament in the middle of next year and the uncertainty in Germany about the next government coalition, which will delay decisions.
We want a banking union with all its elements, which includes a single resolution mechanism with its three components: a European resolution regime, a European resolution fund and a European resolution authority. And we want it in place close to the time single supervision starts in November next year. It is ambitious but doable. The European Parliament will stop working in April. That means finishing the law-making beforehand. That is why, from a European perspective, it so important that a major Member State will form a new government soon. Then we can have a European Council position that will pave the way for legislation. This is in my view the biggest task ahead of us in the next few months. It is of the utmost importance, because it will provide a key contribution to reducing the fragmentation in the euro area.

The German government has said that Treaty revision is needed for a single resolution authority and it doesn't agree on the use of the European Stability Mechanism for the recapitalisation of banks.
We want a joint regime, a joint fund and a joint agency. The ECB lawyers agree with the legal basis of the European Commission proposal for a European resolution regime. This is disputed by the German government and will have to be resolved. It is related to the question of who the resolution agency is: it cannot be and should not be the ECB, as it is the supervisor. The most difficult question, because it is about money, is the resolution fund. We should have a joint fund, financed by a levy on banks. But it will take time to build up, say ten years. In the meantime, there should be a fiscal backstop. And it could be the ESM. Compare this with the United States, where the resolution agency is the Federal Deposit Insurance Corporation, which has a permanent credit line at the Treasury. The ESM could be the fiscal backstop to the European resolution agency. This would require a revision of the ESM Treaty; it is a lower hurdle than changing the European Treaty. I think it is feasible before the European Parliament is out.

You may soon be on the other side of the negotiating table, as finance minister in a "grand coalition".
My term at the ECB ends in 2019. My intention is to fulfil that term.

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