European Monetary Union # UE (Unión Europea) Monetaria

European Monetary Union:
Issues in Supervision
Agenda
• Introduction
• TARGET
• Separation of Central Banking and
Supervision
• Impacts on Business
• Outlook and Conclusion
Participating countries in the
EMU
The Eurosystem
• Deciding and implementing monetary policy
• Conducting foreign exchange operations
• Operating payment systems
Responsibilities of the The
national central banks
• Manage changeover to euro
• Introducing the euro in their countries
• Creating the necessary systems to effectively
circulate the euro banknotes and coins
• Withdrawing national currencies
• Advice and promote the use of the euro
TARGET
Trans-European Automated Real-time
Gross settlement Express Transfer
Main objectives of the TARGET
• Provide safe and reliable mechanism for
cross-border payments on RTGS basis
• Increase the efficiency of intra-EU crossborder payments
• Serve the needs of the ESCB's monetary
policy.
The advantages of using TARGET
•
•
•
•
•
Flexible liquidity management
Risk reduction
Real-time operation
Operating times to suit everyone
Possibility of reaching almost any EU credit
institution
• Full end-to-end transmission of information in
TARGET payment messages
• Costs of making a payment
Separation of Central Banking
and Supervision
• Every european country: NCB
– Monetary policy
– Supervision
One institution
• Eurosystem:
• Supervision?
MONETARY POLICY
Separation of Central Banking
and Supervision
• Supervision:
regulations
every EMU Member own
• Monetary Policy and Supervision from
TWO INSTITUTIONS
Separation of Central Banking
and Supervision
Treaty establishing the European Community TITLE VII
(ex Title VI) ECONOMIC AND MONETARY POLICY
Chapter 2:Monetary policy
Article 105 (ex Article 105)
5. The ESCB shall contribute to the smooth
conduct of policies pursued by the competent
authorities relating to the prudential
supervision of credit institutions and the
stability of the financial system.
Separation of Central Banking
and Supervision
• Every EMU country
– Maintain own banking stability
– Contrast to monetary policy of Eurosystem
• Example
Separation of Central Banking
and Supervision
• Goal: standard in banking supervision in EMU
• Banking Supervison Committee ESCB
• Co-operation
Separation of Central Banking
and Supervision
• Integrate every bank and financial
conglomerat in EMU region
• Uniform supervision
 Financial and Economic Stability
IMPACT ON BUSINESS:
How will the introduction of the
euro affect companies’ marketing
strategies?
•Reduce or remove any differences in the
prices of their goods and services
• Prices can be expected to fall
IMPACT ON BUSINESS
•Sensitive or psychological points disappears
•Will repackage products or change their
weights
•They will have review their marketing
strategies.
IMPACT ON BUSINESS
Small and medium-sized enterprises:
•The disappearance of exchange rate risk.
•Increased competition in the banking
industry and lower interest rates
•They are going to think like in a domestic
market.
IMPACT ON BUSINESS:
Large enterprises:
•Will enjoy a reduction in many of their
costs.
•Will affect employment policies, pricing
and marketing and decisions.
•Competition in some sectors will be
stronger.
CONCLUSION:
• We should move as rapidly as possible to the
new model.
•The system of national supervisors needs to
operate as effectively as a single authority.
CONCLUSION:
•We have to wait for until needs will be
set in place.
•Assignment of supervisory tasks to the
European Central Bank
•That will allow a kind of euro area collective
supervisor.
CONCLUSION:
•The view for the euro area appears to
be favourable.
•Impulse of growth might eventually turn
out to be even stronger
THAN YOU FOR
YOUR
ATTENTION.