articles | 10 September 2013

EU Parliament and ECB reach compromise on bank supervision

The European Parliament and the European Central Bank have resolved a dispute over the new financial supervisor, paving the way for EU lawmakers to sign off on new rules allowing the ECB to supervise banks next year.

Earlier, lawmakers warned that they could delay their approval for granting the ECB the power to police euro zone banks, presenting an embarrassing potential hitch for one of the bloc's flagship reforms. The threat was made as the European Union's legislature, led by its president Martin Schulz, demanded that the ECB be more accountable to EU lawmakers in its new role, a push that is being resisted by ECB President Mario Draghi, members of parliament say. But late on Tuesday, the ECB confirmed a deal had been struck in phone negotiations between Schulz and Draghi. "There is an agreement between the parliament and the ECB," an ECB spokeswoman said, adding that this clears the way for the parliament's vote on Thursday.

A parliamentary official added that the deal was agreed on the basis that the supervisory body would provide details of its decision-making on a confidential basis to the European Parliament. The deal would give lawmakers who want to hold the ECB to account next year ameaningful record of how the central bank makes decisions once it becomes the bloc's single supervisory authority in the Autumn. Earlier in the day the parliament had threatened to delay its approval needed to get the supervisor up and running citing the ECB's refusal to allow lawmakers access to their meeting's minutes.

A discussion paper between the two sides, obtained by Reuters over the weekend, showed that the ECB was resisting the parliament's draft requirements, among other issues, on detailed minutes of meetings on banking supervision, offering to provide "summaries" instead. That is based on concerns at the bank that the sensitive information contained in the minutes might become public. Draghi has also underlined the importance of confidentiality for central bankers' independence of judgement not to be undermined.

Members of the European Parliament had been due to sign off on the creation of this new supervision role on Tuesday - an important first step towards the long-awaited 'banking union' to police banks and jointly tackle their problems. Now they will cast that vote on Thursday.

Source: Financial Mirror

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