The LSI sector as a whole will be overseen by the ECB when it comes to risk concentration. Furthermore, the ECB may also put forward recommendations and standards for LSI supervision. Therefore, I expect a harmonisation of supervisory practices for both SSM- and Non-SSM banks. This will contribute to the supervisory level playing field in Europe and fuel greater competition among credit institutions.
And if the exchange rate continues to weaken, that could in the long run impair savers’ confidence in this new currency, both in Europe and beyond. There was a time when one dollar cost over 3 marks and so the mark has been weaker against the dollar than the euro. And at that time no one ever viewed the mark as a bad currency.