Members of the European Parliament have started tough negotiations with EU members on the implementation of a new bank supervisory system that should prevent the repetition of the financial crisis. A deal on the new regulatory body must be reached before the elections to the EU Parliament in May 2014. According to the parliamentary statement, the ongoing talks are believed to be difficult as positions are divided and talks are still not where lawyers would like to see them. Moreover, many MEPs insist that the new system should not be vulnerable to any political agenda, and should be also as little cumbersome as possible.
In December last year, European finance ministers agreed on a Single Resolution Mechanism (SRM) whose role is to intervene in the case of a falling bank and eventually shut it down before it can do much harm to the economy. The most problematic issue during the negotiations on the SRM was the matter of finance and the decisive power in the event of a bankrupting bank. Obviously, EU’s most powerful states, such as Germany, will likely have the most say in any decision to close down a bank.
In addition to the regulatory framework and SRM, banks will have to contribute to a back-up fund over the next ten years until it reaches the amount of 55 billion euro. This fund, though, will not be supervised by the Parliament but it will be covered by bilateral treaties. On Wednesday (8 January), a brief statement was provided to the public quoting Mrs Elisa Ferreira, the MEP leading the talks, that the new system should be “truly European” and its decision-making process must operate swiftly and be bereft of any political influences. The system should be introduced next year and be fully operational in ten years’ time from its opening.
