Michel Barnier, head of the European Commission’s (EC) financial services arm, said that the EC was confident it could win Germany over on the matter of the European Central Bank (ECB) overseeing all eurozone banks.
Bloomberg reported Friday that Barnier said it was urgent that the system be put into place in the region. He was quoted saying, “There’s no German resistance. It’s a realistic proposal. We think a decision can be taken, should be taken, before the end of the year.”
European Union policymakers had said that a single overseer of the region’s banks should be a condition of allowing those banks direct access to the European Stability Mechanism’s (ESM) permanent rescue fund, a reservoir of some 500 billion euros ($650 billion).
Wolfgang Schaeuble, Germany’s finance minister, was outspoken last week, during a meeting of EU finance ministers in Cyprus, against a eurozone rush to implement a system of bank oversight by a single authority. He has also said that the riskiest banks should come under oversight by the new system first.
Schaeuble has also warned that moving too quickly to put an oversight authority into place would not be wise, and warned that it would take time to build the “sizeable apparatus” necessary for the ECB to supervise more than 6,000 eurozone banks.
On the other hand, the EC, France, Spain and Italy are pushing for a rapid standup of the new authority.
Barnier was quoted saying, “From the first day, the European Central Bank as a supervisor should have the right to look closely into the activities of any bank and see where there may be problems.” He added that the ECB should have “the right to step in, to call up to Frankfurt a bank that might be causing difficulties,” and that he would not attempt to challenge the European banking system’s “diversity.”
In the report, he said, “We are very fortunate. We have very big banks, universal banks, which have international dimensions: Deutsche Bank, BNP, Barclays. We have national banks, regional banks, savings banks, mutual banks. This diversity is a chance for us, it’s a richness. There’s nothing in our text that will put that into question.”