German Finance Minister Wolfgang Schaeuble’s concerns about the legal basis for a common European authority and fund for bank failures won’t delay the creation of the system, Austria’s financial watchdog said.
The schedule for introducing all elements of a planned European Union banking union hasn’t changed, Helmut Ettl, co- chairman of the Finanzmarktaufsicht regulator, or FMA, told journalists in Vienna late yesterday.
“When the pressure is great enough, solutions will be found,” Ettl said. “We’re very optimistic about that.” The contention that treaty changes are needed to set up the banking union are “disputable,” FMA co-head Klaus Kumpfmueller said.
The European Central Bank and Michel Barnier, the EU’s financial services chief, have called for a European Resolution Authority to intervene at crisis-hit banks, saying the step is essential to untangle the fates of lenders and sovereigns. Barnier said he will present draft legislation in June.
Schaeuble told his EU counterparts at a meeting in Dublin last week that setting up a central authority to deal with failing banks requires treaty changes. The German minister has also argued that revising the bloc’s rules would benefit the ECB’s bank supervision arm by ensuring independence from monetary policy.
Austrian Finance Minister Maria Fekter has backed Schaeuble’s view, saying that a “firewall” between monetary policy and banking supervision at the ECB isn’t strong enough. “The ECB is not a supervisory body, according to EU treaties. The ECB is a monetary institute,” she said.
Ministers in Dublin endorsed plans to hand supervision powers to the ECB, a step billed by Barnier as a cornerstone of the banking union, after committing to “work constructively” on any proposals for treaty change.
To contact the reporter on this story: Alexander Weber in Vienna at email@example.com
To contact the editor responsible for this story: Mariajose Vera at firstname.lastname@example.org