FRANKFURT, Germany (AP) — The head of the European Central Bank says the institution will be careful to keep its monetary policy functions separate from its new banking supervisory responsibilities when it takes over as Europe's top bank watchdog.
Mario Draghi said Monday the bank will draw on the experience of other central banks and set up procedures "that ensure functional separation."
He told the European Parliament that stable banks would make monetary policy more effective. That's because monetary tools such as interest rates can lose some of their effectiveness when the banking system is shaky.
European leaders agreed to give the ECB new responsibilities to oversee the biggest and most important banks across the 17 EU countries that use the euro after criticism that national supervisors have been too slow to intervene.