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Opponents counter that it will reduce choice and weaken oversight by splitting consumer and prudential supervision.
At one level, the case for more intrusive prudential supervision seems weak.
His appointment as governor is for life, and he has control over competition issues as well as prudential supervision.
Measures including cuts in interest rates, collective action to help third countries and more prudential supervision of the banking sector should be taken immediately.
Ignazio Visco, the Bank of Italy's governor, has said rather disingenuously that the central bank does not police banks or fight crime but is concerned with prudential supervision.
Although monetary policy is now conducted in Frankfurt, NCBs retain many other central-banking tasks, including the prudential supervision of banks.
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In many countries there are plans to give them responsibility for "macro-prudential supervision", an ugly term for fretting about financial excesses.
The flawed logic of this proposed change is that only the biggest firms are systemically important; that only they require the contingency lending that the Fed provides at its discount window; that only they will be involved in future crises; and that overseeing these firms is sufficient to provide the "macro-prudential supervision" the central bank's charter requires.
On June 19, two days after the Obama plan's introduction, E.U. leaders reached agreement on a new framework for coordinated (rather than unified at E.U.-level) macro- and micro-prudential supervision along the lines proposed by Jacques de Larosiere and endorsed by the European Commission on June 9.
Namely, the laissez-faire, unregulated (or aggressively deregulated), Wild West model of free market capitalism with lack of prudential regulation, supervision of financial markets and proper provision of public goods by governments.
The directive also put home-country supervisors in charge of prudential oversight while host-country regulators were to ensure that local bank branches, wherever their headquarters, observed local rules.In contrast, securities regulation and supervision across Europe are chaotic.
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