EU ministers give final OK to create joint banking supervisor, argue over financial backstops

Print
Email
|

Associated Press

Posted on October 15, 2013 at 9:07 AM

LUXEMBOURG (AP) — European Union finance ministers have approved the creation of a centralized banking supervisor for the bloc.

The European Central Bank will operate the new supervisor who will directly oversee the bloc's 130 biggest banks.

The so-called single supervisory mechanism is due to be operational late next year after assessing European banks' balance sheets to identify possible capital shortfalls. If the supervisor finds that a bank needs help, a bank rescue authority would step in to unwind or prop up ailing lenders.

However, EU finance ministers remain far from agreement on how to design and fund a bank rescue authority.

The aim of the EU's banking union is to make sure that a bank failure in one country does not threaten to overwhelm an individual state and, in turn, threaten the wider region's stability.

Print
Email
|