Sept. 7 (Bloomberg) -- The European Central Bank would gain the power to vet potential owners of banks under a European Commission proposal to create a single financial supervisor in the euro area, according to a document published by Il Sole 24 Ore.
The Frankfurt-based central bank “should have the task to assess the acquisition and disposal of significant holdings in credit institutions,” according to a document published on the Milan-based newspaper’s website today that was identified as a draft of the commission’s proposal.
A board for supervisory issues would be created in the ECB led by a member of the Governing Council and composed of officials from the central bank and national authorities, according to the document. A commission spokesman declined to confirm the document’s authenticity or to comment on its publication when contacted by Bloomberg News.
The ECB would oversee all banks in the euro area and have consolidated supervision powers over financial holding companies, according to the document. The ECB would be able to levy fees on the industry to cover the costs of supervision and could perform inspections and impose sanctions under some circumstances. The central bank would also be charged with granting and revoking banking licenses in consultation with member states, the document states.
National regulators would need to coordinate closely with the central bank, according to the document. Under the plan, national governments would retain oversight of tasks including payments services, supervising branches of non-EU banks, and preventing money laundering and terrorist financing.
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