LONDON, Oct 20 (Reuters) - European Central Bank policymakers will be able to use the information they gain from their new banking supervisory powers in the traditional monetary policy side of their jobs, ECB Vice President Vitor Constancio said on Monday.
The ECB will next month take over the supervision of around 120 the euro zone’s most important banks. It is one of the bloc’s flagship responses to the financial crisis but marks a huge broadening of the central bank’s primary role of keeping inflation in check.
“The separation of the two policy functions (monetary policy and supervisory) does not preclude benefitting from combining them,” Constancio said at an event at London think-tank Chatham House.
“Combining and using the experience is one aspect of the synergies that emerge from having all these functions under one roof,” he added, giving the example of a financial crisis.
“If policymakers are members of the same institution, they can decide independently but in a pragmatic way, taking spontaneously into account the spillovers between policy areas.”
Reporting by Marc Jones