Ophanides

Ralph Atkins

Europe’s new system of financial supervision maybe taking shape, but there are still gaping holes – and it is distinctly possible that policymakers will stumble into them. That was the, rather sobering, message of Athanasios Orphanides, Cyprus’s central bank governor, in a speech just delivered in Bratislava.

It is worth paying attention to what he had to say. Mr Orphanides, who learnt the ropes of central banking at the US Federal Reserve, is one of the smarter economists on the European Central Bank’s 22-strong governing council. That gives him greater status than perhaps a central banker from a Mediterranean island would usually command.

The European Union is close to an agreement on setting up new pan-European regulatory authorities and a “systemic risk” council headed by the ECB’s president. But Mr Orphanides suggested the emphasis had been put on preventive measures – and not enough on how to clear up the mess when financial institutions run into trouble.