Saturday

30th Jul 2016

Ministers hoping to bridge divide on EU banking supervision

  • The ECB is set to become supervisor of the eurozone banking sector (Photo: Valentina Pop)

EU finance ministers are meeting Wednesday afternoon (12 December) in a bid to reach a deal on rules making the European Central Bank the single supervisor of the eurozone banking sector.

“There are five issues that need to be tweaked", according to one senior EU official.

Dear EUobserver reader

Subscribe now for unrestricted access to EUobserver.

Sign up for 30 days' free trial, no obligation. Full subscription only 15 € / month or 150 € / year.

  1. Unlimited access on desktop and mobile
  2. All premium articles, analysis, commentary and investigations
  3. EUobserver archives

EUobserver is the only independent news media covering EU affairs in Brussels and all 28 member states.

♡ We value your support.

If you already have an account click here to login.

They include the voting system in the existing pan-EU banking regulator (EBA) and the decision-making process in the supervisory board of the European Central Bank.

There is also expected to be discussion on which banks the ECB will directly supervise.

The Frankfurt-based bank is expected to oversee significant banks, as well as those having received public money and those with cross-border operations.

However, it is not clear what significant means in terms of prompting the Frankfurt supervision. The current draft proposal would classify a 'significant' bank as having for assets worth at least €30 billion or 20% of national GDP, although some governments, including Germany, are bidding for a figure close to the $50 billion threshold used in the US.

The rest of the banks will remain under national supervision but the ECB is likely to have the “legal right” to step in if it wants to.

Negotiations are also expected on maintaining the independence of the bank as well as when the single supervisory mechanism (SSM) should come into force by putting in place a 'Chinese wall' to clearly demarcate the ECB's monetary policy role from bank supervision.

The law governing the SSM is expected to come into force mid 2013 with the ECB to assume the role in 2014.

Current wording allows for the bank to defer its supervisory role until April 2014 if it feels it is not ready.

However pressure from Germany and others may see this potential deferring period extended until July 2014.

But despite the outstanding points, diplomats are relatively confident that finance ministers will reach a deal – if only because no one has much appetite for seeing the issue come to the table of EU leaders, meeting in Brussels for their December summit on Thursday and Friday.

"Clearly the overall success of the summit and of the work this autumn will be very largely judged on whether there is agreement tonight on a single supervisory mechanism,” said one diplomat.

“I am pretty confident that we will find a solution,” said another.

Stakeholders' Highlights

  1. Counter BalanceThe Trans Adriatic Pipeline: An Opportunity or a Scam in the Making for Albania?
  2. Dialogue PlatformFethullah Gulen: I Condemn All Threats to Turkey's Democracy
  3. GoogleHelping Emergency Services Find You When You Need It Most
  4. Counter BalanceWhat's New in the Investment Plan for Europe: Business as Usual or True Innovation ?
  5. Belgrade Security ForumMigration, Security and Solidarity within Global Disorder: Academic Event 2016
  6. GoogleHow Google Fights Piracy: Creating Value While Fighting Piracy
  7. EJC"My Visit to Israel" - Opinion by MEP Lopez Aguilar, Chair of the EP Working Group on Antisemitism
  8. World VisionChildren Migrating, Out of School and at Work as Hunger Deepens in Southern Africa
  9. European Healthy Lifestyle AllianceStand-Up (and Exercise) to Prevent Chronic Diseases
  10. Centre Maurits CoppietersLaunches a Real-time News Hub Specialised in EU Stakeholders
  11. GoogleEU-US Privacy Shield: Restoring Faith in Data Flows and Transatlantic Relations
  12. World VisionWorld Leaders & Youth Advocates Launch Partnership to End Violence Vs. Children

Latest News

  1. EU encouraged car industry to cheat, French report says
  2. Terrorism and migration top EU public's concern
  3. Spain's Rajoy warns of minority rule
  4. Car lobby complained about emissions tampering by others
  5. Critical IMF report heralds new Greek bailout battle
  6. EU free movement must be curbed, UK says
  7. EU political pressure alone cannot save the rule of law
  8. Merkel: Attacks won't change refugee policy