European Union finance ministers will try to break a deadlock tomorrow on a euro-area bank-failure authority that the European Central Bank says is vital to the bloc’s efforts to prevent future financial crises.
The ECB begins to supervise euro-area banks next November, and wants a “strong and independent” resolution authority with a central fund to cover the cost of saving or shuttering lenders. That puts it at odds with German Finance Minister Wolfgang Schaeuble, who prefers a network of national regulators and has led opposition to EU financial-services chief Michel Barnier’s proposed Single Resolution Mechanism.
EU nations have made scant progress toward a compromise since Barnier introduced his plan in July. Now they’re staring at a year-end deadline set by the bloc’s leaders. The most contentious issues they face are the common fund, the scope of the mechanism and the question of who’ll have the final say in ordering a bank closure.
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