ECB Candidate Lautenschlaeger Backs Euro Bank-Failure Authority

Germany’s candidate for a seat on the European Central Bank Executive Board, Sabine Lautenschlaeger, signaled support for a centralized agency to deal with failing euro-area banks, while saying not all lenders may need to contribute to a common resolution fund.

“Having banking supervision on a European level, you need to have a resolution mechanism on a European level, too,” Lautenschlaeger said in testimony late yesterday before the European Parliament’s Economic and Monetary Affairs Committee in Strasbourg, France. “This is a balance of liability and control you just need to have. So I am very much in favor” of the proposed Single Resolution Mechanism, she said.