CovOps
Location : Ether-Sphere Job/hobbies : Irrationality Exterminator Humor : Über Serious
| Subject: Shuffling deckchairs on the Titanic: EU Unveils Bank-Failure Plan in Face of German Opposition Wed Jul 10, 2013 8:23 am | |
| The European Union’s executive arm is heading for a showdown with Germany over its blueprint for shuttering or restructuring failing banks, a plan intended to complement the European Central Bank’s oversight of lenders.
Michel Barnier, the EU’s financial-services chief, unveiled a proposal today for a single resolution mechanism that gives the European Commission the power to decide when banks need to be saved or shut, potentially resulting in the use of public funds. Germany has warned this may violate the EU’s basic laws by usurping national control over finances.
“We have to stick to the given legal basis, as otherwise we risk major turbulence,” German Finance Minister Wolfgang Schaeuble said yesterday in Brussels. “I would strongly ask the commission in its proposal for an SRM to be very careful, and to stick to the limited interpretation of the given treaty.”
EU leaders last month reiterated their support for setting up the resolution mechanism as an integral part of a planned banking union, without specifying how it should work. At issue is how much authority the new European entity would possess, and what recourse national governments would have to dispute its decisions.
“From a political point of view, the conferral of a power to wind up banks on the commission is arguably the greatest transfer of sovereignty in the history of the EU and points toward a fiscal, as well as economic and monetary, union,” Alexandria Carr, a lawyer in the London office of Mayer Brown, said by e-mail.
More: http://www.bloomberg.com/news/2013-07-09/eu-steels-for-battle-over-bank-resolution-plans-led-by-germany.html |
|