Europe Divided Over Banking – ECB vs Germany

The European Central Bank clashed with Germany on Tuesday over how quickly the euro zone should set up a full banking union, calling for it to be ready by mid-2014 after Berlin declared it wanted a slower pace.

European Union finance ministers meeting in Brussels on Tuesday are due to discuss plans for the banking union, which could help the currency bloc deal with failing banks.

“We want a single European resolution regime, together with a single resolution agency and a single resolution fund that is financed by a levy from the banking industry,” ECB Executive Board member Joerg Asmussen, who is German, said.

“This should come into place in parallel with the single supervisory mechanism hopefully by the summer of next year,” he told reporters on entering the finance ministers’ meeting.

The comments set him at odds with German Finance Minister Wolfgang Schaeuble, who has argued that while current EU law would allow the ECB to act as a single banking supervisor, setting up a new single resolution authority to restructure or wind up failed banks will require changes to EU treaties.

That process could take years and would be risky, as the revised treaties would need to be ratified by 27 EU parliaments.

via Reuters

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