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This is the ECB’s biggest task for 2014

Thursday, 2 Jan 2014 | 1:21 AM ET
SocGen CEO: A good 2013 for Fed & ECB
Wednesday, 1 Jan 2014 | 9:37 PM ET
In an interview with CNBC's Stephane Pedrazzi, the CEO of Societe General praised both the Fed and ECB for their "excellent job" in 2013.

The single biggest task for the European Central Bank (ECB) in 2014 will be the implementation of the banking union in the currency bloc, said Frédéric Oudéa, CEO of Société Générale.

"The first major objective is to implement the banking union. [The ECB] should not underestimate the operational challenge, which is to create a new regulator [and] recruit close to 1,000 people," Oudéa told CNBC late Tuesday.

"I'm very confident in Daniele Nouy, she's a very seasoned, experienced, talented regulator, so I think she will put in place something robust, but it's a big task," he said. Daniele Nouy, who has been the head of France's banking regulator, was appointed to head the euro zone's new banking supervisor last month.

(Read more: Europe's banking marriage needs 'hard work': Trichet)

In December, the European Union reached a long-awaited agreement on a mechanism to manage the closure of the region's failing banks.

The so-called single resolution mechanism, together with a bolstering of the ECB's supervisory powers and region-wide deposit insurance, makes up the European "banking union" – a deal that is expected to significantly reduce the need for tax-payer funded rescues of lenders.

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As for the Federal Reserve, Oudéa said he expects the U.S. central bank will act towards winding down its quantitative easing (QE) program by the end of 2014.

Oudéa says the end of QE will likely be accompanied by a slight increase in long-term interest rates, which he deems positive as it marks a normalization of market parameters.

(Read more: Germany's new face at the ECB: Who's in the frame?)

"It's good to see the Fed starting to reduce the liquidity it's providing. The very positive thing is that market did not over react, but took it more positively," he said. This month, the Fed will take its first step toward winding down its huge monetary stimulus program by reducing the pace of monthly asset purchases by $10 billion to $75 billion.

Discussing his outlook for the global economy, Oudéa sees a steady improvement in both Europe and the U.S.

"For the world as a whole, [I see] slightly better figures. I think what's important is we had effectively the beginning of tapering at the end of 2013, it means for [a] good environment for 2014," he said.

—By CNBC's Ansuya Harjani; Follow her on Twitter @Ansuya_H

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