The European Union (EU) Internal Market and Services Commissioner Michel Barnier said that the European Commission could be the resolution agency for the winding down of financial institutions before the permanent bailout fund, known as the European Stability Mechanism (ESM) takes over.
"The bailout fund could take over banking resolution as soon as it has become a European institution", Barnier told the German business daily Handelsblatt on Wednesday.
The EU commissioner did note however that an agreement still needed to be reached on whether the resolution authority would cover all the region's banks or, as Germany has demanded, that it only be responsible for larger banks considered to be a systemic risk.
Barnier said that small banks could also go bankrupt "and rock the whole system. I don't think much of the idea of leaving the resolution of smaller banks to national supervisory agencies, but it is true that we need to find a compromise."
EU finance ministers are expected to discuss the issue as part of the larger framework for the banking union in the October 14th Eurogroup meeting and the October 15th Ecofin gathering in preparation for the European Council meetings, known as the European Summit, scheduled for October 24th and 25th.
The Council's official agenda states that "the European Council, in the presence of ECB President Draghi, will assess the state of play in the completion of the banking union, in particular the implementation of the single supervisory mechanism and the remaining pending proposals to complete the banking union"
Source:LiveCharts
"The bailout fund could take over banking resolution as soon as it has become a European institution", Barnier told the German business daily Handelsblatt on Wednesday.
The EU commissioner did note however that an agreement still needed to be reached on whether the resolution authority would cover all the region's banks or, as Germany has demanded, that it only be responsible for larger banks considered to be a systemic risk.
Barnier said that small banks could also go bankrupt "and rock the whole system. I don't think much of the idea of leaving the resolution of smaller banks to national supervisory agencies, but it is true that we need to find a compromise."
EU finance ministers are expected to discuss the issue as part of the larger framework for the banking union in the October 14th Eurogroup meeting and the October 15th Ecofin gathering in preparation for the European Council meetings, known as the European Summit, scheduled for October 24th and 25th.
The Council's official agenda states that "the European Council, in the presence of ECB President Draghi, will assess the state of play in the completion of the banking union, in particular the implementation of the single supervisory mechanism and the remaining pending proposals to complete the banking union"
Source:LiveCharts
