These developments would call for the establishment of a single financial supervisor which should not be the central bank – the argument runs – since this would worsen conflicts-of-interest between central banking and prudential supervision and would lead to a concentration of power. In my view, one should not be too dogmatic about these arguments.
Situations in which such conflicts of interest would arise are very rare in practice and central banks, like all other public bodies, are subject to accountability procedures. In any case, these concerns are dispelled in the euro area setting by the fact that decision-making takes place at different levels: euro area-wide for monetary policy, national for prudential supervision.