Non-euro nations who join a proposed common bank supervisor would be able to withdraw at any time under an Oct. 8 compromise proposal on giving the European Central Bank oversight over banks within the 17-nation euro zone, according to documents obtained today by Bloomberg News.
“The member state may request the ECB to terminate the close cooperation at any time. In this case, the ECB shall immediately proceed to adopt a decision terminating the close cooperation,” according to the document, prepared in advance of technical meetings this week.
European Union leaders in June embarked on plans to build a common supervisor as a step toward offering direct bank bailouts from the euro-area’s firewall fund. All 27 EU nations must approve the oversight proposal for it to move forward, and non-euro area nations have said they need more assurance their voices won’t be drowned out.
This week’s compromise proposal is more specific about how the ECB will coordinate with national supervisors in participating nations. It says the ECB must share its information with relevant national authorities, especially in cases that involve the prospect of putting a bank into resolution.
Non-euro countries that take part in the banking union would have access to meetings of euro-area finance ministers when banking issues are discussed. They would also have guaranteed access to the ECB’s annual banking reports and to oral or written answers to questions from the euro-region ministers’ group or the European Parliament, the draft says.
Power to Summon
The proposals also include provisions for any participating nation, including non-euro countries, to summon the head of the ECB’s supervisory board before their national parliament.
Finance ministers from Denmark and Sweden said that the compromise proposals don’t go far enough to ease their concerns. “There are severe problems still,” Swedish Finance Minister Anders Borg told reporters ahead of today’s meetings.
To find further solutions to problems like voting rights on the ECB bank supervisory board, ECB input will be needed, EU Financial Services Commissioner Michel Barnier said today.
“Acceptable solutions are possible to all member states’ concerns on single supervisor,” Barnier said in a message posted on the Twitter Inc. service. He said there should be a “fair system” for non-euro countries and that designing this “lies in part” with the ECB.
Banks might need to pay fees to cover the cost of regulation under the proposal, and the Frankfurt-based ECB could participate in the London-based European Banking Authority’s board in some instances. The ECB would need to hold a public rule-making process, according to the draft.