Germany, Finland, oppose Commission as future bank resolution body

Fri Sep 13, 2013 6:03am EDT
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By Annika Breidthardt and Martin Santa

VILNIUS (Reuters) - Germany and Finland said on Friday the European Commission should not have the final say on when and how a euro zone bank could be closed, a position that could further delay the bloc's banking union project.

A single resolution authority for all euro zone banks, with a dedicated fund to finance its decisions, is intended to complement the single bank supervisor - the European Central Bank - as part of a banking union that would break the vicious circle between weak banks and indebted governments.

The ECB is to take up its new responsibilities in autumn of 2014 and EU policymakers hope to have the resolution body ready at the same time or soon afterwards.

The European Commission proposed in July that it have the final say on resolving banks at a pan-European level, even though it could act on the recommendation of a Single Resolution Board that would be made up of representatives of national authorities and the European Central Bank.

Berlin has consistently said those powers should be exercised at a national level.

"Resolution should generally be done by national authorities and not by the EU Commission," German Finance Minister Wolfgang Schaeuble told the Boersen Zeitung newspaper. "It is not an appropriate central resolution authority.

"Instead, where necessary in disputed cases, a central resolution board should be able to take binding decisions when there are conflicts between national resolution authorities," he said.

TREATY CHANGE?   Continued...

A worker adjusts and cleans the logo of the European Commission at the entrance of the Berlaymont building, the EC headquarters, in Brussels September 12, 2013. REUTERS/Yves Herman