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Work on setting up the EU's bank supervisor and undertaking the planned asset quality review is "well on track", ECB bank supervisor chair Daniele Nouy told the Economic and Monetary Affairs Committee on Tuesday. Legislators on all sides now need to show willingness to compromise in order to agree on a mechanism for winding down banks that can deliver rapid and reliable decisions and mobilise credible and readily accessible funding, she added.
MEPs questioned Ms Nouy about the operational steps ahead of the start of EU bank supervision and negotiations under way on the bank resolution mechanism.
Bank supervision
The key issues raised were the organisation of the asset quality review, how the bank supervisor planned to ensure accountability, and what safeguards it would deploy to limit the risk that banking union would lead to a split between Eurozone and non-Eurozone banks.
Bank resolution
MEPs also asked Ms Nouy about the difficult issues that still need to be resolved between the European Parliament and Council negotiators.
Ms Nouy replied that although it is important to agree a deal under the current Parliament, this deal must ensure that "prompt and efficient decisions" can be taken over a weekend at most. "A fire-brigade does not ask the city Council to intervene when there is a fire", she said of the overly complex decision making process advocated by some EU countries.
She also stressed that the bank-financed resolution fund must be able to borrow, especially in its early years. Moreover the fund should become truly single at most five years after it is set up, although the bank contributions would not need to be accelerated accordingly.
Michel Barnier
MEPs will be hear Commissioner Barnier later this afternoon (17:15). Bankers' bonuses and the bank single resolution mechanism are expected to top the agenda. You can follow the meeting by clicking on the link to the right.
