Athens, 02/04/2014 (Agence Europe) - At a meeting in Athens on Wednesday 2 April, Europe's money men discussed introduction of banking union in the eurozone via the bank supervision mechanism (SSM) and the bank resolution mechanism (SRM).
Danièle Nouy, chair of the bank supervisory board at the European Central Bank that was set up in order to hive off bank supervision from monetary policy, set out the preparations at the ECB for it to become the eurozone's bank supervisory body in November 2014. On Tuesday, the ECB published a document detailing the board's rules of procedure.
Between now and the autumn, the ECB and the European Banking Authority (EBA) will make a detailed assessment of the strength of the 6,000 banks in the eurozone, focussing on the 130 big banks to be directly supervised by the ECB. The head of the EBA, Andrea Enria, explained that consultations were under way with the European Commission's competition department over the rules that will apply to preventative recapitalisation of solvent banks found by the stress tests to require further capital.
SRM. On Tuesday, Jeroen Dijsselbloem, the head of the Eurogroup, said that the intergovernmental agreement on which the bank resolution fund (SRF) would be partially based during an eight-year transition period would be signed when the SRM regulation has been formalised in April by the European Parliament. The SRF will be signed on the fringes of the Ecofin Council in May. Jonathan Faull, Director General of DG Internal Market at the Commission said the question of bank contributions to SRF national compartments had only been discussed in general. Later this year, the Commission will be publishing implementing measures in this connection.
Faull said no non-eurozone country has said that it wants to join banking union. Denmark is tempted, but wants to avoid having to hold a referendum on the matter, but it managed to get the Council of Ministers to issue a statement to the effect that unanimous voting among participating countries will be required if a country wishes to leave banking union. (MB)