Brussels, 31/08/2012 (Agence Europe) - The European Commission plans to separate the competences of banking supervision in the eurozone, for which the ECB will have the final responsibility, and those of banking resolution. “There should be a distinction between supervision and resolution”, the spokesperson for Commissioner for the Internal Market Michel Barnier said on Friday 31 August. And he added: “Until an EU resolution body is created that can also rely on an EU resolution fund funded by the financial system itself, until that day, resolution powers remain in the hands of competent national authorities.”
In order to complete banking union, the European Commission hopes that two legislative proposals currently on the table will be adopted by the end of 2012. The first concerns revision of the directive on the guarantee of bank deposits. The negotiations between the European Parliament (EP) and the Council are stumbling on the level of financing of the funds (1.5% of the deposits covered for 15 years for the EP, 0.5% for the Council) (see EUROPE 10555 and 10401). The Commission would like to introduce an element of solidarity between national funds. A second reading is needed under the codecision procedure. Put forward last June, the second legislative proposal concerns the prevention and organisation of a resolution, indeed the dismantling, of a banking actor in difficulty (see EUROPE 10628). It leaves it up to the member states to decide that a single national fund be tasked with supporting the costs of a bank resolution and guaranteeing savers' deposits up to €100,000. Forced to help each other, the national funds would reach in 10 years an allocation equivalent to 1% of the deposits covered.
Once these two proposals have been adopted, the Commission wants to move quickly and lean on the single system of supervision in order to propose, at the beginning of 2013, the creation of a single resolution authority.
The future supervisory mechanism will progressively enter into force to cover the 6,000 banks of the eurozone by 2013 (see EUROPE 10678). “On 1 January 2013, all banks being the object of public support via the European stability mechanism will be concerned. On this date, theoretically, the direct recapitalisation of banks by the emergency funds will be possible. Then, the single supervision will extend to all the banks which are considered as systemic. Finally, on 1 January 2014, the mechanism will be applied to the 6,000 banks of the eurozone”, Barnier said in an interview published in the daily Les Echos on Friday (our translation throughout). The Commission's position of covering all eurozone banks contrasts with the view of German Finance Minister Wolfgang Schaüble who, in a column in the Financial Times on Friday, said that he wants to give the ECB final responsibility on supervision to banks of systemic importance only.
In order to separate monetary policy and bank supervision at the ECB, a supervision council will be created at the European institution in parallel with the Governing Council, the commissioner said. National authorities will continue to control the national credit establishments on a daily basis - they will keep watch for respect of the rules on consumer protection and payment services. Finally, the creation of a single supervisory mechanism requires amending voting modalities at the European banking supervision authority, Barnier said. (MB/transl.fl)