An article in today’s Financial Times reports that, on 12 September 2012, Jose Manuel Barroso, European Commission President, is set to unveil proposals to create a single EU banking supervisor by extending the powers of the European Central Bank (ECB).
Under the proposals, a 23-member ‘supervisory board’ of the ECB, separate from its governing council, would be given sweeping powers with respect to the authorisation, supervision and resolution of all 6,000 eurozone banks. This, it is felt, would put Brussels on “a collision course” with the German government, which believes that the ECB should deal solely with the Eurozone’s 20-25 largest banks, leaving national supervisors with responsibility for smaller, non-systemically important (but sometimes more politically sensitive) banks.
Before the proposals can come into force they must be approved by all 27 EU states. It is hoped that this can be accomplished before the end of 2012.