Brussels, 23/09/2013 (Agence Europe) - In December, MEPs may choose the president and vice-president of the new supervisory committee at the ECB that will be in charge of directly supervising the 130 big banks in the single bank supervision mechanism.
The appointments may be made in a vote by her committee in December, explained the chair of the economic and monetary affairs committee, Sharon Bowles, on Monday 23 September during a monetary hearing with the president of the ECB, Mario Draghi, who said it was for member states to suggest individuals.
Commenting on progress in introducing the single bank supervision mechanism, Draghi welcomed the vote in mid-September at the European Parliament plenary endorsing the regulatory set-up (see EUROPE 10920) and said that sustained progress was being made in preparations at the ECB so that in the autumn of 2014 the 130 big banks representing 85% of bank assets in the eurozone can be supervised directly by the ECB. Pleased with the close cooperation with national supervisory bodies that has led to nearly 80 civil servants being seconded to Frankfurt, he said work was ongoing in several areas: preparing a single supervisory manual; establishing the single supervisory system; and preparatory work on assessing bank health (risks, balance sheets, stress tests). Under the interinstitutional agreement reached with the Parliament on democratic scrutiny and exchange of information (see EUROPE 10919), the ECB will submit quarterly reports on its work as the European bank supervisory body.
SRM. In response to a question from Elisa Ferreira (S&D, Portugal), Draghi said that introduction of the second phase of Banking Union (the bank resolution mechanism or SRM) would face the “problem” of how the bank resolution fund at European level was to be funded until cash arrives to fill its coffers from the financial industry. The time to be bridged will be more than ten years, he said. Ten years is the time suggested for the gap between establishing the SRM and the creation of a resolution fund, which will need some €60 billion to €70 billion over time. Draghi said that aid in the form of a budget line would be needed in the meantime. Some analysts, like ECB Executive Board member Jörg Asmussen, say the European Stability Mechanism should provide the funding if necessary, but Draghi said he didn't know whether that would be possible.
The head of the ECB said that following the green shoots of recovery in the second quarter of 2013 (growth of 0.3% in the eurozone), economic recovery would be slow and gradual in the eurozone due to a slight improvement ion domestic demand and continued monetary easing. (MB/transl.fl)