European Union leaders are set to call on their finance ministers to make urgent headway in agreeing on how to handle banks that founder in European Central Bank-led assessments next year.
Nations must put in place “a comprehensive and coordinated approach in preparation for” the exams, according to a draft version of conclusions to be adopted by EU heads of government at an Oct. 24-25 summit in Brussels.
“It should involve all appropriate arrangements, including national backstops,” for lenders that struggle in the tests, according to the document. Ministers should complete the plan by the end of November.
The Oct. 21 draft conclusions, obtained by Bloomberg News, omitted a reference to a “European approach” on backstops in an Oct. 14 version, highlighting the skirmishing on how centralized the EU’s approach to troubled banks should be.
Policy makers at the Frankfurt-based ECB last week discussed the ground rules for its probes into the health of the 130 banks it will start supervising next year. The check-up is part of the ECB’s demands for assuming the burden of overseeing banks from Deutsche Bank AG to Intesa Sanpaolo SpA.
While the ECB has called for governments to make sure that robust arrangements are put in place for handling weaknesses exposed by the tests, finance ministers including Germany’s Wolfgang Schaeuble have warned that lenders shouldn’t expect to have direct access to euro-area firewall funds.
Leaders expect “full support and cooperation by the national supervisors to ensure complete transparency, which is key for the credibility of the exercise,” according to the document.