The same tension between European integration and national control also poses problems for bank supervision.
Economists' suggestions include new rules on government spending, unified bank supervision and a bigger fund for financial emergencies.
Meantime, European Union finance ministers are meeting in Luxembourg Tuesday to work on a plan for EU bank supervision.
The first is financial: the euro zone needs a region-wide system of bank supervision, recapitalisation, deposit insurance and regulation.
Whatever the outcome, though, the case looks likely to make bank supervision look a lot less dreary than usual.
But since the Bank will take over bank supervision in Britain from the Financial Services Authority (FSA), Mr King's stance is deeply controversial.
There have also been calls for the creation of an Asian BIS to enhance regional cooperation in such areas as bank supervision and reserve management.
But will Cyprus continue to be so attractive now that the troika is scrutinising the banks and the euro zone is moving towards centralised bank supervision?
The Germans are obstructing the move towards common bank supervision.
In Europe, for instance, responsibility for bank supervision, and the provision of liquidity in the event of a bank panic, will officially remain with national regulators and national central banks.
As is also common with principles espoused by European leaders, no clear explanation has been provided for the need to ensure this operational separation between monetary policy and bank supervision.
FORBES: Euro Area Banking Union: Should Bank Supervision and Monetary Policy Be Separated?
This completed a hat-trick: on May 25th, a report on bank supervision from the Financial Stability Forum, a group of international regulators, had ranked the islands in the lowest grade.
She said that developing countries needed to respond by beefing up bank supervision, restricting credit to fast-growing areas, imposing capital requirements that changed with the economic cycle and monitoring their foreign exchange exposures.
In a 1993 article co-written with Gerard Caprio, an economist at the Bank, Mr Summers argued that it was unrealistic to expect better bank supervision alone to forestall bank failures in poor countries.
But many national regulators admit that in the event of a serious crisis the European Central Bank would have to step in, and that bank supervision will eventually be handled at the regional level.
Overall, I believe that an integrated approach to monetary and bank supervision would provide the most efficient set of procedures for diagnosing problems with banks and then prescribing the correct mix of solvency and liquidity measures required to resolve these problems.
FORBES: Euro Area Banking Union: Should Bank Supervision and Monetary Policy Be Separated?
The question of whether central banks should be involved in bank supervision is an old chestnut that central bankers and academics have debated for many years and practice in the years before the global financial crisis had swung towards separate bank regulators.
FORBES: Euro Area Banking Union: Should Bank Supervision and Monetary Policy Be Separated?
The removal of banking supervision from the Bank of England that occurred in 1997 is now being reversed.
FORBES: Euro Area Banking Union: Should Bank Supervision and Monetary Policy Be Separated?
As a bank it faces more intrusive supervision from the Federal Reserve, tougher capital requirements and restrictions on investing.
ECONOMIST: What the death of the investment bank means for Wall Street
And how much grip would the European Central Bank have on the detailed supervision of Cypriot banks if it was given overall responsibility?
ECONOMIST: The latest euro-zone member to request a bail-out
Questions have been raised over the Bank of Italy's supervision after an internal document obtained by Milena Gabanelli, an investigative reporter, showed an inspection visit to Monte dei Paschi in mid-2010 revealed the existence of two derivatives contracts, highlighting the risks.
As the allegations emerged, Australia's central bank, faced criticism over its supervision of the firms.
The proposals are based on the work of the Basle committee on banking supervision, which represents bank supervisors in the big industrial countries, and has spent several years designing a new framework to set minimum capital standards for internationally active banks.
Several days ago Prince appointed Chief Financial Officer Todd Thomson to take over supervision of the private bank in Japan as well as become CEO of Citigroup's Smith Barney unit, where the costly scandal over research and investment banking had erupted.
Unlike the politicians at Copenhagen, the central bank governors and heads of banking supervision who form the oversight body of the Basel Committee on Banking Supervision - which decides these vital rules for banks - well, they don't exactly court the media.
It will take over the supervision of debt issuance from the Bank of Italy, and it will get some of the bank's staff and property.
The state of Banco CAM in particular has fuelled doubts about the credit quality of other lenders and hurt the Bank of Spain's reputation for tight supervision.
ECONOMIST: Spain��s worst banks get a new owner: the taxpayer
Wave after wave of bank failures there have forced governments to tighten regulation and supervision, to privatise unwieldy state banks and to open once-pampered institutions to competition.
应用推荐