July 2, 2012 / 10:51 AM / 5 years ago

UPDATE 1-Nowotny does not see ECB as direct bank supervisor

(Recasts with comments on ECB supervisory role for banks)

* Nowotny sees “sensible solution” for bank supervision

* Not realistic for ECB to be direct supervisor

* Sees Austrian inflation falling in near future

VIENNA, July 2 (Reuters) - European Central Bank policymaker Ewald Nowotny does not see a direct European banking supervisory role for the ECB but said on Monday the bank could play a role if common principles were agreed following last weekend’s European Union summit.

“To what extent will the ECB be involved in banking supervision? What is important is the principle that there should be no help without conditions,” Nowotny told a news conference.

“I don’t think it’s realistic to build the ECB up into a single, unified bank supervisor of all of Europe’s thousands of banks... but we will find a sensible solution,” he said.

Nowotny broadly welcomed the results of the summit, at which EU leaders agreed to bend aid rules to shore up banks and bring down borrowing costs for stricken members like Italy and Spain.

“As a whole, one can say that the summit brought positive results. It was in the right direction, but now there are details to sort out,” Nowotny told a news conference.

Earlier, Nowotny, who is also Austria’s central bank governor, said he expected inflation in Austria to fall in the near future, echoing forecasts by the International Monetary Fund.

“We share the view that inflation will go down in the foreseeable future,” Nowotny said. (Reporting By Georgina Prodhan; Editing by Toby Chopra)

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