Brussels, 11/10/2012 (Agence Europe) - The problem of non-euro countries being allowed to take part in the decision-making process for the common eurozone bank supervision mechanism under the aegis of the European Central bank is connected with legal niceties because the current suggestions are based on Article 127.6 of the EU treaty, which allows member states give the ECB certain bank supervisory powers. Non-euro countries do not see it as being in their interest to join a mechanism whose decisions they could not influence, the decisions being made by a bank supervisory committee to be set up by the ECB in order to keep its monetary policy ringfenced from bank supervision (see EUROPE 10706).
Rene Repasi of Heidelberg University in Germany said at a public hearing organised by the European Parliament's Economic and Monetary Affairs Committee on Wednesday 10 October that the price to be paid for making the ECB the overarching bank supervisor in the eurozone was the non-involvement of non-euro countries. He said that a doable alternative would be making use of Article 352 of the EU treaty on subsidiary EU powers, which allows for the EU powers to be adjusted to match objectives set out by the treaty in cases where the treaty itself does not provide the powers needed to achieve said objectives. Repasi says the advantage of this is that it means the European Banking Authority (EBA) can be made responsible for supervising the banks, and all EU27 member states are represented on the EBA, so the non-euro countries not planning to join the single currency in the future can opt out of the system, whereas the current option covers the seventeen eurozone countries with an opt-in, potentially, for countries that are not yet in the euro. In addition, the EBA option would give the European Parliament greater powers in the introduction of the new rules.
Ignazio Angeloni, director general of financial stability at the ECB, said that it has already been agreed to use Article 127.6 and it is laid down in the June 2012 eurozone summit statement (see EUROPE 10645). He said that the fact that the treaty makes it possible to make the ECB the sole eurozone bank supervisory body requires people to work on this before considering anything else. He said that national supervisory bodies would continue their daily work of supervising banks.
Sylvie Goulard (ADLE, France) said that either one uses Article127-6 and it's the ECB, in which case there would be a problem for non-euro countries, or one uses a different article of the treaty, that would provide something else that might still be physically within the ECB's new orbit, but it would not be the ECB that had the ultimate power in the last resort. If Poland doesn't find that the solution ultimately chosen is satisfactory, then it will postpone membership of it until it joins the euro, warned Polish secretary of state for finance Jacek Dominik, saying that it was unacceptable for non-euro countries to join a system they would not be able to influence but whose decisions would affect them.
Bafin does not want to give up its powers. Recommending that the European legislator does not rush into things, Raimund Roeseler, head of banking supervision at Germany's Federal Financial Supervisory Authority Bafin, said it was simply impossible for the ECB to supervise all 6,000 banks in the eurozone and anyone transferring this power to the ECB does not have the same idea as himself about what proper bank supervision involves. He says the ECB simply does not have the resources to take all the daily decisions needed for all eurozone banks and called for the introduction of a specialist strategy and toolbox of EU bank supervision mechanisms before the single bank supervisory system comes into force.
Unanimous decision-making at the EBA? EBA president Andrea Enria commented: “The introduction of the Single Supervisory Mechanism is raising the contentious issue of voting mechanisms in the Board of Supervisors of the EBA. Non euro area Member States have expressed their concerns as to the weight coordinated voting by euro area representatives would carry in EBA decisions. While I understand these concerns, I am very worried that the solution could simply raise the required votes for approving a proposal, coming very close to a unanimity principle. Our ability to decide could be seriously hampered. (...) I would suggest that new mechanisms for decision making be considered, which are less based on country representation and country weights. After all, the EBA is requested to make technical decisions that work for the Single Market.” (MB/transl.fl)