Banking (dis)union

15 May 2013 By Neil Unmack, Olaf Storbeck Follow @unmack1

A banking union will be flawed without a central resolution authority, but that may mean a cumbersome treaty change. Any compromise could only be a stop-gap. That won’t derail the project, but it will leave Europe’s crisis defences weaker for some years.

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European Central Bank policymaker Joerg Asmussen this week stressed that the ECB wants to have a single supervisory authority and resolution regime for euro zone banks in place next year: “We want a single European resolution regime, together with a single resolution agency and a single resolution fund that is financed by a levy from the banking industry. This should come into place in parallel with the single supervisory mechanism hopefully by the summer of next year,” Asmussen said in Brussels on the eve of a meeting of euro zone finance ministers.
This view, which is supported by the European Commission, is at odds with the German position. German Finance Minister Wolfgang Schaeuble argues current EU treaties do not provide a strong enough legal basis for a central resolution authority but only allow for a coordinated network of national resolution authorities working under a common set of rules.

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