France, Germany Propose Arbitration Step in ECB Oversight Plan
The arbitration plan was prepared for a meeting of European Union finance ministers today in Brussels. Governments are seeking to thrash out a deal to hand bank oversight powers to the ECB in a bid to ease the bloc’s fiscal crisis. ECB supervision would be mandatory for euro-area nations and optional for other EU states.
The proposal would allow national authorities to challenge opposition from the ECB’s Governing Council to decisions taken by the central bank’s supervisory board. Disputes would be resolved “by a committee representing national supervisors of participating member states and the ECB,” according to the document obtained by Bloomberg News. The committee’s decision would have “binding effect for the ECB.”
The proposal would “ensure a clear separation between banking supervision and monetary policy,” according to the document. It would also give a fair voice to non-euro nations that choose to participate in the supervisory system, according to the document.
Non-euro nations are banned by the EU’s treaties from sitting on the ECB’s Governing Council, but will be represented on the institution’s bank oversight board.
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