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A deal on banking supervision legislation that will strengthen EU-level oversight of many EU banks was struck by Parliament and Council negotiators on Tuesday. Parliament's negotiators inserted many provisions strengthening the system's transparency and accountability. They also ensured that its working structures will be imbued with a European spirit, rather than reflecting just a sum of national interests.
Marianne Thyssen (EPP, BE), rapporteur for the text entrusting the ECB with bank supervisory powers, said: "This deal is a very important first step towards a full banking union. It will enforce integration of the financial sector and strengthen confidence. We have set up a system where people will be working for the European interest and where there will be more accountability. The system should also be attractive to non-Eurozone Member States."
Sven Giegold (Greens, DE), rapporteur for the text amending the role of the European Banking Authority, said: "This agreement is a breakthrough for democratic control of the financial sector. Crucially, the agreement reached today will provide for strengthened democratic accountability under the proposed system, with the European Parliament getting a clear scrutiny role over the European Central Bank in its performance of its tasks. The deal will also help ensure that the diversity of the EU's banking system is taken into account of by the supervisory system."
Key areas in which Parliament pushed through changes:
- stronger accountability of the supervisor, including through the co-appointment and dismissal of the Chair and Vice Chair and better access to information for the European Parliament,
- stronger role for national parliaments,
- better access to documents both for the EU supervisory authority vis-à-vis banks and also for the EP and national parliaments vis-à-vis the EU supervisory authority,
- attractive participation conditions for Non-Eurozone countries,
- strict division of European Central Bank staff between monetary policy and supervision, so as to ensure that the supervisory arm of the ECB is truly accountable,
- strengthening the European Banking Authority, in relation to the ECB, and also improving its ability to undertake stress tests and obtain information, and
- establishing a system which will uphold the diversity of the EU banking sector.
Next steps
Parliament's plenary must now ratify the deal in the near future. In the meantime, national parliaments may also express their views and an inter-institutional agreement on the details will be hammered out by Parliament and the ECB on to shape appropriate accountability systems.
For legal reasons, the details of the Parliament's powers of control over the ECB supervisor will be drawn up through an inter-institutional agreement. Parliament's adoption of the final legislation is contingent on the successful conclusion of this inter-institutional agreement.
