Cyprus Was Unique Case, Not Model for EU: ECB's Coeure
The banking crisis in Cyprus was a unique case and the rescue plan used should not be seen as a model for other European countries that fall into trouble, ECB Executive Board member Benoit Coeure said on Tuesday.
Coeure told Europe 1 radio that the bailout agreed for Cyprus underscored the need to improve bank regulation by having the European Central Bank act as an independent supervisor under plans for a European banking union.
He said he disagreed with Eurogroup head Jeroen Dijsselbloem's assertion that the Cyprus bailout would serve as a model for crises elsewhere, remarks the Dutchman backtracked on after markets read them as meaning private sector bail-ins would play a greater role in future rescues.
"The first lesson is that we need better control of bnks," Coeure said. "We need an independent European regulator, and that will be the case by mid-2014 and it will be the ECB, and we need to identify problems earlier in the euro zone."
"I do not see why we would use the same methods elsewhere," he said of the Cyprus rescue, which alarmed markets by setting a precedent of tapping private bank deposits.
"I think Mr. Dijsselbloem was wrong to say what he said. The Cyprus experience is not a model for the rest of Europe because the situation had reached a level which cannot be compared with any other country."