Germany has considered their initial position and now seems ready to support the European Central Bank to be the EU’s Bank Supervisor. This leaves the UK as the lone voice of dissent. It will be interesting to hear the future BoE Governor Mark Carney thoughts on this matter. There are some analysts that think a Brixit is an event that is more likely to happen than a Grexit.
Germany signaled on Wednesday it was ready to back plans for the European Central Bank to be made the chief supervisor of banks, raising the prospect of a breakthrough on the European Union’s most ambitious financial reform.
Finance Minister Wolfgang Schaeuble told the German cabinet he was “optimistic” about a deal ahead of a meeting of EU finance ministers in Brussels on Wednesday, a German official said, speaking on condition of anonymity.
“We hope for major progress and perhaps a breakthrough (in the talks),” he said. “We have some questions but if they can be resolved by finance ministers today then Germany will not stand in the way of an agreement.”
After three years of piecemeal crisis-fighting measures, agreeing on a banking union would lay a cornerstone for deeper economic and fiscal reforms and mark the first concerted attempt to integrate the bloc’s response to problem banks.
A single banking supervisor for the euro zone and most other EU states would be a crucial step towards that goal, although other issues such as a resolution authority for failed banks, a backstop fund and joint deposit insurance will remain.
France and Germany had been at loggerheads over parts of the plan, but with little time left for the EU to meet a commitment to complete the framework for banking union by the end of the year, both countries redoubled efforts to settle their differences in late night negotiations on Tuesday.