Moscovici Says France Open to Faster Pooling of Bank-Crisis FundRebecca Christie, Mark Deen and Corina Ruhe
France is ready to accept faster pooling of national contributions to a proposed euro-area bank-resolution fund, Finance Minister Pierre Moscovici said.
European Union member states are trying to reach an agreement with the European Parliament on a proposed Single Resolution Mechanism for euro-zone banks before the assembly adjourns for elections in May.
ECB President Mario Draghi said yesterday that money in an accompanying bank-financed fund for covering the cost of saving or shuttering lenders should be fully pooled in five years, half the time proposed by EU finance ministers. The fund could still be filled to its target of 55 billion euros ($75 billion) over 10 years, he said.
If “the idea to speed up” were to emerge from negotiations on the bill between the EU parliament and officials from Greece, which holds the rotating EU presidency, “we wouldn’t be against,” Moscovici said in an interview late yesterday in Washington.
The SRM plan set out by ministers in December calls for the Single Resolution Fund to be built up over a decade, with funds deposited into separate national “compartments” that would merge gradually. German Finance Minister Wolfgang Schaeuble has said the compartments can’t be merged faster than bank levies are collected.
Dutch Finance Minister Jeroen Dijsselbloem, who chairs meetings of euro-area finance chiefs, said in The Hague today that while he seems room for improving the SRM’s decision-making machinery, no room for compromise exists on the structure of the fund.
Finance ministers gather in Brussels next week to discuss whether to give more leeway to negotiators working with the European Parliament on the resolution system, a key part of the flagship EU project to pool responsibility for banks and prevent future financial crises.
Among aspects of the SRM where he could imagine a compromise with the parliament, Dijsselbloem today mentioned “the complicated decision-making process” that involves an SRM board, the European Commission and the Council of the European Union, the institution that represents the interests of member states.
“That’s a possibility,” he said. “I say it carefully. This could be a suggestion I’d give to the Greek presidency.”
Talks on the bill so far have made little progress, and ministers haven’t signaled any breakthrough in the deadlock over how to start the fund.
‘Truly Single Fund’
Draghi yesterday indicated his frustration with the standoff. The “protracted time period” for ramping up the new fund creates uncertainty and could fuel market jitters about dangerous links between banks and sovereign borrowers, he said.
“We would see merits in doubling the pace of mutualization to have a genuine European fund within five years,” he said. “The fund would still only reach its target level after 10 years, yet it would be a truly single fund after five years.”
Draghi said the fund is separate from this year’s review that the ECB is using to examine bank balance sheets as it takes on new duties as the euro-area’s bank supervisor. The ECB assessment will handle “legacy risks,” Draghi said.
Commerzbank Chief Executive Officer Martin Blessing said his bank is waiting until after the ECB’s reviews to decide on dividends.
“We want to make the bank’s capital situation comfortable before paying a dividend,” Blessing said in Frankfurt today.
“The ECB’s asset-quality review and stress test will take place this year, so as a careful businessman, I’d tend to expect no dividend for 2014 rather than expect one, that way you’ll be on the safe side and not be disappointed when we sit here next year,” Blessing said. “Strengthening capital has a higher priority than paying dividends for us at the moment.”