Friday

24th Mar 2017

MEPs strike deal on bank supervision regime

  • The ECB will supervise banks with over €30 billion on their balance sheets (Photo: Valentina Pop)

MEPs and governments have reached a deal on legislation giving the European Central Bank (ECB) new powers to directly supervise the European banking sector.

Under an agreement struck on Tuesday (19 March) the ECB will supervise an estimated 150 banks, including all institutions with balance sheets holding over €30 billion as well as the three biggest banks in each country.

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.

The supervisory powers include the ability to withhold a banking license, approve mergers or acquisitions as well as the right to declare an "emergency' situation.

But the vast majority of the eurozone's around 6000 banks - the small- and medium-sized ones where critics say potential credit problems lie - will remain under national supervision, a key demand of Germany.

The new regime will cover the eurozone, with the ten countries outside the single currency able to choose whether they want to opt-in.

The supervision regime is seen as the first key component of the eurozone banking union aimed at breaking the vicious link that has seen governments plunge into debt as they bailed out banks.

The single-supervisory mechanism (SSM) comprises two regulations increasing the role of the Frankfurt-based ECB and the European Banking Authority (EBA), set up in 2011 as one of three EU agencies to supervise the financial sector.

In a concession to the UK, as well as other countries outside the eurozone, the voting rules in the European Banking Authority (EBA) will be changed to require a double majority of countries inside and outside the single currency area.

Green MEP Sven Giegold, one of two MEPs leading negotiations on behalf of parliament, described the agreement as "a major landmark in the move to create a European Banking Union". He added that the new regime would "overhaul the current disjointed light-touch national supervision".

Giegold's co-rapporteur, centre-right MEP Marianne Thyssen, commented that the regime would "enforce integration of the financial sector and strengthen confidence."

MEPs claimed victory in their bid for equal powers with governments on the hiring and firing of the chair and vice-chair of the SSM.

Speaking with reporters, Giegold said that the rules meant that governments could not ignore objections from parliament on appointees to the supervisory board. "The parliament has the right to say no, and no means no", he said, in a reference to the appointment of Yves Mersch in November to the ECB's executive board despite the opposition of parliament.

Negotiations on the inter-institutional agreement are expected to start immediately, with a view to a final vote by MEPs at the May Strasbourg plenary session.

The European Commission is now expected to table legislation in June to set up a single resolution mechanism to wind up failing banks and measures to harmonise national deposit guarantee schemes to protect savers.

EU summit lays out next steps for banking union

EU leaders have agreed to take further steps towards banking union including the legal minefield of how to wind up ailing banks and make sure the tax payer does not foot the bill.

Eurozone chief in 'drinks and women' row

[Updated] The Netherlands' Jeroen Dijsselbloem faces calls for resignation after saying that crisis-hit countries in southern Europe spent "money on drinks and women" before being helped by others.

Stolen Russian billions ended up in EU states

Illicit money flowing out of Russia ended up in almost every single EU state, an investigation has found, posing questions on the integrity of Europe’s banking systems.

Stakeholders' Highlights

  1. Malta EU 2017New EU Rules to Prevent Terrorism and Give More Rights to Victims Approved
  2. European Jewish Congress"Extremists Still Have Ability and Motivation to Murder in Europe" Says EJC President
  3. European Gaming & Betting AssociationAudiovisual Media Services Directive to Exclude Minors from Gambling Ads
  4. ILGA-EuropeTime for a Reality Check on International Day for the Elimination of Racial Discrimination
  5. UNICEFHuman Cost to Refugee and Migrant Children Mounts Up One Year After EU-Turkey Deal
  6. Malta EU 2017Council Adopts New Rules to Improve Safety of Medical Devices
  7. Nordic Council of MinistersNordic Energy Research: How to Reach 100 Percent Renewable Energy
  8. Party of European SocialistsWe Must Renew Europe for All Europeans
  9. MEP Tomáš ZdechovskýThe European Commission Has Failed in Its Fight Against Food Waste
  10. ILGA-EuropeEP Recognises Discrimination Faced by Trans & Intersex People
  11. Nordic Council of Ministers25 Nordic Bioeconomy Cases for Sustainable Change
  12. European Free AllianceSupporting Artur Mas: Democracy and Freedom Cannot Be Convicted

Latest News

  1. Birthday wishes to the European Union
  2. MEPs set out to give posted workers equal pay
  3. Hohe Cyber-Bedrohung für Frankreichs Wahlen
  4. 'No zero terror risk', EU security commissioner warns
  5. UN could step in where EU fails in child migrant protection
  6. May: London attacker was known to the police
  7. Ending the migrant deal with Turkey may save the EU
  8. Poland unlikely to face EU discipline on rule of law