MEPs demand ECB transparency in bank union talks
By Benjamin Fox
EU officials are expecting to sketch out a deal within the coming weeks on two regulations that will govern the single supervisory mechanism (SSM) to be co-ordinated by the European Central Bank (ECB).
A parliament official involved in the negotiations on the banking union files told EUobserver that "everything has been discussed and we know where the agreement is moving to."
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While officials representing governments are reluctant to open up the texts in negotiations with parliament, MEPs are set to secure amendments preventing officials involved in the supervision regime from being able to leave for jobs in the banking sector.
They also want to guard against conflicts of interest by preventing members of the SSM's steering committee from also having a mandate as a national regulator.
Parliament is also pushing for closer control of the SSM's budget and is demanding the power to approve the chair of the SSM, using a method similar to the Congressional confirmation hearings for nominees to the board of the US Federal Reserve.
Although MEPs only have consultative powers over the ECB regulation, they have threatened to block new rules for the European Banking Authority, on which they have equal legislative powers with ministers, if member states refuse to negotiate.
The parliament's demands come amid concern that the ECB's new role supervising the eurozone banking sector will create conflicts of interest with its monetary policy arm.
Critics claim that the European Systemic Risk Board (ESRB), set up in 2011 to act as a watchdog scrutinising trends in Europe's financial sector, already gives the bank a role in macro-economic supervision that could compromise its monetary policy functions.
Jana Mittermaier, director of pro-transparency NGO Transparency International, told this website that “ECB supervision is supposed to be a fresh start for the eurozone. This means preventing the conflicts of interest, group think and regulatory capture that contributed to the current crisis. If the Council is serious about addressing these risks, regulating the revolving door between supervisors and supervised is crucial.”
Although EU leaders initially set themselves a December 2012 deadline to finalise the first plank of a eurozone banking union, the dates for implementing the rules have slipped. The current timetable now envisages the ECB assuming oversight over the eurozone banking sector from spring 2014.
The European Commission is set to follow up the supervisory framework with legislation later this year for a single resolution mechanism to wind up failing banks and measures to harmonise national deposit guarantee schemes to protect savers.