EU Assembly Delays ECB Supervisor Approval on Democracy Concerns

European Parliament lawmakers delayed endorsing plans to hand the European Central Bank oversight powers, as they seek guarantees that they’ll have democratic control over the new supervisor.

Legislators gave preliminary approval today to a deal struck with governments on the law, while postponing a final decision pending further talks with the Frankfurt-based central bank on information sharing and scrutiny.

Today’s vote “is not the final word on this dossier,” Marianne Thyssen, one of the lawmakers in charge of the parliament’s work on the rules, said during a debate in the assembly. By postponing final endorsement, “we create space for more robust inter-institutional agreements with the ECB on accountability,” she said.

EU leaders called last year for the ECB to take on oversight powers for euro-area lenders in a bid to untangle the finances of banks and governments. The single supervisor for the euro area is a precondition for banks to get direct aid from the currency area’s firewall fund, and is the first step of an EU plan to build a so-called banking union of centralized oversight and crisis management for lenders.

The ECB has urged the EU to proceed swiftly with putting the supervisor law on its statute books, warning that delays complicate its preparations for the new tasks, which the central bank is scheduled to assume next year.

“At present we do not have any legal certainty yet, which means we cannot even rent premises, for example,” ECB Executive Board Member Yves Mersch said earlier this month. “We have no legal authority to sign contracts.”