We will have a mirror site at http://nunezreport.wordpress.com in case we are censored, Please save the link

Wednesday, October 10, 2012

Europe edges closer to banking union

LUXEMBOURG/FRANKFURT – European Union ministers examined a proposal on Tuesday to limit planned new powers for the European Central Bank to supervise lenders, in a bid to allay the concerns of countries outside the eurozone over a new banking union.

The diplomatic drive came as the President of the ECB and Germany’s markets regulator cautioned that setting up a new system of supervision would take up to the end of next year, later than many expected and a potential setback to efforts to help distressed eurozone countries and their banks.

Brussels proposed earlier this month that the ECB take charge of supervising all banks in the euro currency zone in stages from January, as a first step towards creating a banking union under which chiefly eurozone countries would eventually jointly back their lenders.

Winning broad support for a prompt introduction of the new supervision framework is important because it should allow the eurozone’s rescue fund, the European Stability Mechanism (ESM), to directly inject much-needed capital into banks, such as those in Spain.

However, the plan has sparked concerns among the 10 EU countries which do not use the euro that they will be indirectly affected by the ECB’s new supervisory powers and put at a competitive disadvantage, whether they join the scheme or not.

Financial Times

No comments:

Post a Comment