European Union lawmakers have failed in their latest attempt to revive a draft law giving regulators powers to split up risky banks in order to prevent a repeat of the costly taxpayer bail-outs during the financial crisis.
A two-year stalemate between the European Parliament’s center left and center right has so far played into the hands of the region’s banks who want the 2014 proposal scrapped, arguing that other post-crisis rules already tackle the issues.
Centre right parties are against automatically splitting up banks if risky trading passes a set threshold, while the center left is against giving supervisors too much discretion under what is known as the bank structural reform (BSR).
This impasse is despite EU states, who have joint say on the draft law, having agreed a position ahead of final negotiations.
Lawmakers responsible for the measure and Valdis Dombrovskis, European Commission vice president and in charge of financial services, made no progress at a special meeting in Strasbourg on Tuesday night, following a year or so in limbo and an inconclusive committee vote.
“I think there will be a stalemate for quite some time,” said Gunnar Hoekmark, the Swedish center-right lawmaker who is steering the measure through parliament.
“Either the socialists accept our offer or we will still be where we are,” he said, adding that Dombrovskis gave no indication he would withdraw the stalled draft law.
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