Call for common banking system

A real and wide-reaching common banking system — not just one based on supervision and regulation — is needed if the eurozone is to recover, one leading global economist said last night.

Former World Bank chief economist Joseph Stiglitz said even with “more Europe” — a common banking system — or “less Europe”, brought about by a partial breaking up of the current eurozone, the region is likely to be in “turmoil” for some time to come.

Speaking at the opening of the International Bar Association’s annual conference in Dublin, Professor Stiglitz said a common banking system with common deposit insurance rules and “mutualisation of debt” are “the minimum sets of reform needed”.