Bloomberg the Company & Products

Bloomberg Anywhere Login

Bloomberg

Connecting decision makers to a dynamic network of information, people and ideas, Bloomberg quickly and accurately delivers business and financial information, news and insight around the world.

Company

Financial Products

Enterprise Products

Media

Customer Support

  • Americas

    +1 212 318 2000

  • Europe, Middle East, & Africa

    +44 20 7330 7500

  • Asia Pacific

    +65 6212 1000

Communications

Industry Products

Media Services

Follow Us

Euro Banking Union Should Avoid ‘Systemic Danger,’ Prodi Says

Aug. 31 (Bloomberg) -- The planned common banking supervisor for euro-area countries should cover medium-sized lenders to minimize systemic risks, according to former European Commission President Romano Prodi.

“If you have many medium-sized banks that don’t respect the rules, you have a systemic danger,” Prodi said today in a Bloomberg Television interview near Versailles, France. “How can you exercise control only on 10 banks or let’s say a number like that” while having “the biggest part of the system not respecting the rules?” he said.

The European Central Bank would have the sole power to grant banking licenses under proposals to give it supervisory powers and build a euro-area banking union, a European Union official said today, speaking on condition of anonymity because the plan isn’t final. While the Frankfurt-based ECB could decide to withdraw banks’ licenses, national regulators would still control when to shut down a lender.

Under the proposals, which are being drafted by the European Commission, the EU’s regulatory arm, the ECB would also gain discretion over which banks to supervise directly and when it will delegate day-to-day oversight responsibilities, the official said.

To contact the reporters on this story: Fabio Benedetti-Valentini in Paris at fabiobv@bloomberg.net; Manus Cranny in London at mcranny@bloomberg.net

To contact the editors responsible for this story: Frank Connelly at fconnelly@bloomberg.net; Edward Evans at eevans3@bloomberg.net

Please upgrade your Browser

Your browser is out-of-date. Please download one of these excellent browsers:

Chrome, Firefox, Safari, Opera or Internet Explorer.