Today a large majority in the European Parliament voted in favour of legislation to establish a new European banking supervision mechanism within the European Central Bank. After a year of wrangling about the details, the way was finally cleared for the adoption of the legislation on Tuesday, when an agreement on the details concerning the democratic control of the new supervisor was reached by the presidents of the European Parliament and Central Bank. Commenting after the vote, Green finance spokesperson Sven Giegold, who is draftsperson/rapporteur for the EP on the European Banking Authority supervision file, said:
“The centralised supervision of eurozone banks is a leap ahead for the European integration. National control mechanisms have failed dramatically because supervisors primarily defended the interests of their national markets, instead of fighting for stability and the protection of taxpayers. Since 2008, European taxpayers have had to contribute around €5 trillion to save banks from bankruptcy. The European supervisor will take a proper pan-European approach and help overcome the narrow, national approach to banking supervision.
“Extending such significant competences to the ECB cannot occur without ensuring for strong parliamentary control. To this end, we pushed for significant scrutiny rights for the European Parliament and stronger supervisory rights for the national legislators.
“During negotiations on the final legislation, the Greens were able to make sure that European supervision will not overburden small banks with an overly centralised approach or bureaucracy. This will benefit mutual and savings banks in particular. Granting supervision powers to the ECB raised potential conflicts of interest, notably ensuring a clear division between monetary and fiscal policy. The Greens had originally proposed establishing a separate authority for supervision but, in the end, were satisfied that the legislation goes as far as possible in preventing such a conflict of interests.
“Finalising the planned European Banking Union will require further legislation to create the necessary European Resolution Authority for banks, as well as a common resolution fund. This must be urgently delivered and EU member states must join the Parliament in its efforts and finish this project within this parliamentary term.”