Putting the European Central Bank in charge of supervising banks in the euro zone is a good idea but the central bank needs to have the resources to do the job right, ECB Governing Council member Ewald Nowotny said on Thursday.
"As with any supervisory measure you have to watch out that you actually have the means to fulfil the responsibility. That is the discussion to be held now," he told reporters on the sidelines of a markets regulation conference.
The European Commission unveiled sweeping plans for the ECB to supervise all euro zone banks on Wednesday, though Germany immediately raised objections that the proposals risked overstretching the currency bloc's central bank.
Nowotny said it was clear under the new proposal that national and regional supervisors would de facto remain in charge of supervising smaller lenders.
"I do not see national supervisors becoming superfluous," he said, adding the European Banking Authority's ability to set standards also remained intact.
Nowotny said he would welcome it if countries in central and eastern Europe would opt to join the system.
"I think this is a very good and reasonable suggestion that is in the interests of the countries affected. A unified (approach) is an advantage especially for these countries that are so closely interlinked with the rest of Europe," he said.
He was speaking after the EU proposal got negative responses from some non-euro zone governments because of concerns that the new rules could weaken their banks.
(Reporting by Michael Shields; Editing by Toby Chopra)