The first step towards banking union would be a new European agency under the aegis of the ECB which would control the 25 largest banks in the euro zone. European economists are reportedly working on the plan ahead of today's Eurogroup in Brussels. This was announced by the Wall Street Journal this morning. The president of the European Central Bank Mario Draghi but he clarified to ahearing in the European Parliament that "all parties are working hard for a proposal on supervision by the autumn''. Furthermore, Draghi stressed that as far as the banking union and surveillance is concerned, what was decided during the European summit at the end of June must be followed. In other words, supervision remains with the national authorities with the ECB at the center of a centralized architecture.
According to the rumors of the Wall Street Journal, theThe new agency, with a single set of rules for the entire Eurozone, would report periodically to the top management of the ECB. Smaller credit institutions would remain supervised by national authorities. However, the latter would be subject to the control of the new Eurozone supervisor who could be based in Brussels and not in Frankfurt like the ECB.
But these rumors will only be confirmed or denied by Draghi at the end of October.
