European Union leaders may call at a summit his week for “rapid adoption” of common rules for handling failing banks and compensating their depositors as part of a push to build a single rulebook for lenders.
Negotiations on the draft rules, including measures to set up “national funds” for dealing with banks in crisis, should be concluded before the end of 2012, according to draft conclusions that leaders will discuss in Brussels Oct. 18-19.
The document, obtained by Bloomberg News, also calls for work on establishing a single supervisor for banks in the 17- nation euro area to be taken forward “as a matter of priority, with the objective of completing it by the end of this year.”
Euro-area efforts to pave the way for direct bailouts of banks by its firewall fund have foundered because of concerns that plans to build a single euro-area bank supervisor, based around the European Central Bank, would hurt nations outside the common currency. All 27 EU nations must approve the oversight proposal for it to move forward.
“It is important to ensure a level playing field” between nations that sign up for the supervision plan and those that don’t, the draft conclusions say.
“The ECB should be able to use the effective powers conferred on it by the legislation as soon as it comes into force, subject to appropriate operational phasing-in arrangements,” according to the draft conclusions, prepared by EU President Herman Van Rompuy.
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