The new supervisory authority is to be set up gradually at the european central bank (ECB) by march 2014. "This is an important step forward that will make the eurozone stronger," said eu internal market commissioner michel barnier in brussels.
The uniform control for financial institutions in the euro zone is a central component of a european banking union – it is intended to make the financial sector more secure. "We could have avoided many crises with such a mechanism," said barnier.
"With the ECB, we could have prevented the current situation for cyprus as well."The island republic needs aid from international lenders worth 10 billion euros because of its ailing banks – the participation of savers in the program is highly controversial.
According to the EU commission, some 6,000 banks in the eurozone will fall directly or indirectly under the new supervisory regime. According to earlier reports, about 140 to 150 institutions, including about 25 in germany, will be directly supervised by the ECB.
Deutsche bank, commerzbank, DZ bank and the major state banks were allowed to pay for it. Savings banks and cooperative banks will continue to be supervised nationally.
The parliament’s rapporteur, sven giegold, summed up: "this is the biggest step towards more integration since the euro."It should not be underestimated that the member states would share their sovereignty in the control of large banks.
The competences of the already existing european banking supervisor in london have been further strengthened, for example with regard to bank stress tests, according to the green deputy.
The people’s representatives have had a say in the appointment of the head of the new supervisory committee at the central bank. Representatives of the national supervisory authorities and the ECB sit on the supervisory board.
There, decisions are to be prepared – be it capital requirements for individual banks, personnel changes or, in the worst case, the closure of a tottering institution. Barnier stressed that national supervisors will remain in place.
The EU’s plans for a banking union will receive a serious setback with the planned compulsory levy on cypriot bank accounts, experts say. The banking union will also include mutual support for deposit insurance.
However, this plan is still controversial. Supervision is also a prerequisite for ailing banks to be able to tap directly into the euro bailout fund ESM in the future. However, rules still need to be drawn up for this purpose.
The european parliament is involved in the legislation for supervision. The EU’s parliament and member states must later formally approve the compromise reached by the negotiators. A similar compromise on stricter banking rules and bankers’ bonuses is planned for wednesday.
According to the irish presidency, there are no major changes to the original plans. Further consultations were necessary because great britain slammed on the brakes with regard to the bonus cap.