EU to approve bank rules before May election slows legislative machine
By Huw Jones
LONDON (Reuters) - The European Union will sign off on a slew of major reforms this week to allow failing banks to be wound down without public money, clearing its desk before elections in May that may lead to a slower pace of legislation.
This week is the final plenary session of the European Parliament before it breaks up ahead of the vote in May.
The welter of rules the bloc has approved since the worst financial crisis in a generation began unfolding from a corner of the U.S. housing market in 2007 is fundamentally reshaping the banking and securities industry.
The rule changes also strengthen the bloc's grip on capital markets at the expense of national governments to an extent few federalists would have dared to dream of, as policymakers want to avoid more taxpayer bailouts of banks and euro zone countries.
From November, the European Central Bank will directly supervise top lenders in the single currency area, adding to three new EU regulators for banks, insurers and markets launched in 2011 with binding powers over member states.
"There is no question that the regulatory tidal wave and centralization have been triggered by the crisis," said Nicolas Veron, EU policy specialist at Brussels think tank Bruegel.
"After this week, I think a pause is unlikely but a deceleration would be good. There will be a lot of legislative activity, but I am not sure it will be as frantic as it was in the last five years," Veron said.
On Tuesday the European Parliament will approve two major reforms to make it easier and quicker to close failing banks so they don't collapse messily or require taxpayer money. Continued...