In the Bundesbank’s opinion, monitoring activities under the Stability and Growth Pact should be independent of political institutions, if the assessment is to be a neutral one. For example, the European Stability Mechanism could give such an assessment. Currently, there are debates about reforming the ESM into a “European Monetary Fund”, which might also provide assistance in times of asymmetric economic shocks.
Countries with an institutional structure different from ours might clearly find universal application of Basel II to benefit their banking system, but we do not think that imposing Basel II on most of our banks is either necessary or practical.