Draghi Wants Centralized Control Over EU Banks

European Central Bank head Mario Draghi has told European leaders they should establish a centralized authority to oversee their troubled banks. Draghi criticized national regulators on Thursday for choosing “the worst possible way” to help their banking sectors. He said they deliberate too much and delay tough decisions.

Right now, most of the authority to regulate banks is vested in national governments. But Draghi wants to replace this model with a “banking union.” This financial overseer would have a centralized regulator, a centralized bailout fund, and an EU-wide deposit insurance backstop.

Adopting Draghi’s plan means governments would have to hand over parts of their national sovereignty. But the Italian banker presented that sacrifice as part of Europe’s long-term vision:

The next step is to basically for our leaders really to clarify what is the vision for a certain number of years from now. How is the euro going to be, to look like in a certain number of years from now? What is the union vision that you have a certain number of years from now? And I think the sooner this is specified the better it is.

Some European leaders—like the Jesuit-trained Draghi—already have a clear vision of a unified future for the EU. Draghi’s assertiveness is helping strengthen a powerful alliance between the world’s most powerful bank, Germany, and the Vatican. Watch for that vision of a unified, unrestrained Europe to become a reality—sooner, rather than later.