Brussels, 22/05/2014 (Agence Europe) - Greek Finance Minister Yiannis Stournaras says that banking union will be beneficial for both investors and ordinary people in the eurozone.
At an Academy of European Law conference in Athens on Thursday 22 May, Stournaras said that the new bank supervision mechanism, SSM, would ensure that banks' financing costs reflect their strengths and weaknesses. He said that as supervision, provisioning and dealing with non-performing loans will be harmonised, investors will have comparable, more transparent data at their service, which will help them make informed choices. For consumers, the introduction of banking union among the 6,000 eurozone banks will establish healthy investment conditions, cut the costs of retail banking through greater competition and ensure better savings protection that avoids taxpayers always being the first called upon to bail out failing banks.
Under banking union, the European Central Bank becomes the direct supervisory body for the 130 or so big banks in the eurozone on 4 November 2014 after an assessment of eurozone banks that it is carrying out together with the European Banking Authority. From 1 January 2015 onwards, a bank resolution mechanism, SRM, will ensure the orderly winding down of failed cross-border banks, for which cash may be available from 2016 onwards from a bank resolution fund, the SRF (see EUROPE 11000). (MB)