For example, prudential supervision is at the national level, monetary policy at the EMU-12 level, and the regulatory framework within which both supervision and monetary policy take place at the EU-15 level. Let me turn now to the relationship between monetary and fiscal policy. It is not too long ago that interest rates in many countries were set by the finance ministry.
One of the reasons behind combining monetary and fiscal policy decisions in a single institution was the idea that this would result in a better policy mix. Today, in contrast, virtually all central banks in the developed world are independent, and it is hard to think of a country were the treasury decides on the level of interest rates.