DW: Does a common currency require joint liabilty? And who's going to pay the price? Obviously the first question has to be: is it "payback time" for Germany?
Horst Löchel: I don't think it's payback time for Germany although Germany has of course a lot of benefits from the euro, so the country should have interest that the euro will survive.
But I mean do you sympathize with the outrage we have here in Germany. A number of economists have joined forces here to protest the idea of a European banking union and joint liability. Where do you stand on this?
I am not really happy with this kind of opinions. I think we have a monetary union so we should have at the end of the day also a banking union. Of course we need time, we have to start with the first step and the first step is of course to set up a European banking supervision authority here in Germany and the rest let's see.
But what about joint liability? Does this mean that German taxpayers, people here in Germany or in other countries have to pay with their savings perhaps, are they safe?
I think this is two questions. First of all I don't think much will change for the savers, this depends on the standards and I don't think the standards of the European banking supervisory authority and a deposit insurance system will be different for example to the standards we have now for example here in Germany. The problem is a little bit distribution - that means for example if banks in the south of Europe get in trouble then of course there is a transfer of money from the north to the south. But anyway this is normal in this kind of banking euro in our European Union.
Let's stick with this European banking supervision idea as well, because supervision doesn't always work. We have this latest Barclay's fixing scandal. The CEO, Bob Diamond had to resign over the scandal. At a parliamentary hearing in London, Diamond said the bank's executives believed the Bank of England approved of the strategy. True or not, it certainly raises more questions about the current state of financial supervision. Now what role do you think could the European Central Bank could play here?
I think the European Central Bank should pay a very important role in banking supervision in Europe because she has the know-how, she is dealing all the days with these banks by providing money to these banks. On the other side I think we need another authority for banking supervision in Europe because the ECB already has to do a lot of things so better to have a separate institution, but anyway the ECB should be very strongly involved.
And this separate institution for example, should that supervise all the banks, we are talking about an awful lot here, or is it enough just to keep an eye on those so-called system-relevant banks?
I think so, I mean we have in Europe around a little bit more than 20 system relevant banks who are really big big banks. I think first of all the European supervision authority should take care of these banks and later we will see how it works.
Interview: Monika Jones