Banking supervision should cover all banks, national and regional, explains European Banking Authority Chair Andrea Enria.

Interview: Banks must be able to go bankrupt if necessary

Andrea Enria, Chairman of the EBA,  the European Banking Authority,

you are visiting the European Parliament.

The European Council has given the ECB  the role of policing the banks,

which partly contributed to the crisis  that we are in now.

What role will you now play  in monitoring the banks?

First of all I have to say  that this transition is vital.

and a single currency controlled  by national banks cannot work.

It's important for the banks  to be under EU supervision.

It's not a question of who does it,  but of doing it at European level.

The division of tasks  between us and the ECB

will mean that we set out the rules  for all the banks in the single market,

in all 27 countries  in the European Union,

while the ECB will monitor the banks  in the eurozone.

and we will coordinate the ECB  and the other authorities

which will still have monitoring  responsibilities on a national level

in the UK, Sweden, Poland  and other non-eurozone countries.

Do you think that all banks  should be monitored?

over whether these changes should apply  to all banking institutions

or just those with branches  in different countries.

Regarding the centralisation  of responsibility,

I think the ECB should monitor  all of the banks.

Having some banks in a country  under EU supervision

could create instability  in crisis situations,

with transfers from one bank to another.

It's best if all banks  are under EU supervision.

The practical monitoring  can be decentralised.

The ECB can rely on national authorities  to carry out checks,

especially on local banks such as  cooperatives and building societies.

So there will be a decentralised approach,  but the EU will have ultimate responsibility.

So the ECB will be looking down from  above and you will be setting the rules.

Who's to say that the national  inspectors will do their job better now?

They'll still be the ones  checking the figures.

No rules or controls can guarantee  that a bank won't collapse.

The important thing is to have  mechanisms to ensure

and avoid excessive bills for taxpayers.

could you guarantee that a crisis  like this could be avoided in future?

The point is that banks  must be able to collapse.

For me, if we have another Dexia...  -At last somebody's said it!

If we have another Dexia tomorrow,  it can leave the market

We would make Dexia's creditors  and shareholders pay,

and limiting the impact  on public finance.

Good luck. Thank you. Goodbye.  -Thank you. Goodbye.