Germany’s expressed preference to restrict centralised supervision to 25 banks reminds me of the debate about the EU mergers and acquisitions regime in the late 1980s. The disagreement between member states was solved through a size threshold. The European Commission would deal with large cross-border mergers, member states with the rest. Germany now applies the same thinking to the question of banking supervision. Mr Schäuble and his colleagues are looking at this from the perspective of competition policy, not financial stability, which is absurd. They fear an erosion of their own competitiveness. Once again, national interests take priority over the eurozone-wide common good.
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