In a sign of support for single European bank regulator, Asmussen’s call was echoed by Deutsche Bank co-chief executive Juergen Fitschen, who yesterday said Germany should support the idea of a common banking union.
Asmussen said it was “unacceptable” markets were doubting the euro’s future. “The risk premia of sovereign bonds now reflect not just the insolvency risk of some countries but even an exchange rate risk, which there should not theoretically be in a currency union. The markets are pricing in a break-up of the euro zone. For a currency union, such systemic doubts are not acceptable.”
Asmussen added a market union would address the instability. Deutsche’s Fitschen said Germany should back a union. “The elements make sense if you think about Europe as a common market. I feel that if we out of Germany argue that we are different, we invite other countries to also argue for exemptions,” he said.