Saturday

27th Aug 2016

Bundesbank wants treaty change for banking union

  • Germany's central bank is an influential member of the ECB (Photo: Bundesbank)

Germany's Bundesbank is concerned about the European Central Bank's mix of powers once it takes over supervision of banks next year, insisting on an EU treaty change as soon as possible.

In its July report published Monday (22 July), the Bundesbank welcomed the creation of the so-called banking union, pooling at eurozone-level the supervision of large banks and, at a later stage, the power to tell banks to close down when they run into trouble.

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 banking union cannot solve the current crisis, but can bring a valuable contribution to making future crises less probable," the Frankfurt-based bank said in its report.

The Bundesbank is sceptical about the legal anchoring of the Single Supervisory Mechanism (SSM), questioning whether the European Central Bank can have the ultimate say in bank supervision, while preserving its monetary policy independence.

The setting-up of supervisory boards as well as assurances by ECB chief Mario Draghi that the two activities will have a "Chinese wall" inbetween have failed to convince the Bundesbank.

"An effective separation of monetary policy tasks and supervisory tasks is not possible without changes to the institutional framework of the ECB, as enshrined in the EU treaties," the report reads.

A further concern is that non-eurozone banks are not included in the new supervisory system: "A truly European banking supervisor, that would cover the entire single market, should comprise of a binding, single banking supervisor for all EU members."

The Bundesbank urges politicians to "swiftly" proceed with EU treaty change that would put the banking union on a solid legal base.

But such a process usually lasts a few years and opens a whole set of different requests from member states and the European Parliament, which would also be involved in the process.

News in Brief

  1. Hungary plans to reinforce border fence against migrants
  2. France's highest court suspends burkini ban
  3. Greeks paid €1bn more in taxes in June
  4. Greek minister denounces EU letter on former statistics chief
  5. Turks seeking asylum in Greece may cause diplomatic row
  6. Merkel becomes digital resident of Estonia
  7. Report: VW will compensate US dealers with €1bln
  8. EU mulls making Google pay news media for content

Stakeholders' Highlights

  1. GoogleBrussels - home of beer, fries, chocolate and Google’s Public Policy Team - follow @GoogleBrussels
  2. HuaweiSeeds for the Future Programme to Bring Students from 50 countries to China for Much-Needed ICT Training
  3. EFASpain is not a democratic state. EFA expresses its solidarity to Arnaldo Otegi and EH Bildu
  4. UNICEFBoko Haram Violence in Lake Chad Region Leaves Children Displaced and Trapped
  5. HuaweiMaking Cities Smarter and Safer
  6. GoogleHow Google Makes Connections More Secure For Users
  7. EGBAThe EU Court of Justice Confirms the Application of Proportionality in Assessing Gambling Laws
  8. World VisionThe EU and Member States Must Not Use Overseas Aid for Promoting EU Interests
  9. Dialogue PlatformInterview: "There is a witch hunt against the Gulen Movement in Turkey"
  10. ACCAACCA Calls for ‘Future Looking’ Integrated Reporting Culture With IIRC and IAAER
  11. EURidNominate Your Favourite .eu or .ею Website for the .EU Web Awards 2016 Today!
  12. Dialogue PlatformAn Interview on Gulen Movement & Recent Coup Attempt in Turkey