The banking union puzzle is starting to take shape and today the first piece has been put in place. In fact, the European Commission has officially launched the proposal to confer to the European Central Bank the powers of single supervisor of the banks of the Eurozone. The ECB will play a central role in overseeing the more than 6 financial institutions in the Eurozone. The Eba, the European banking authority, will instead be in charge of drafting a single regulation, valid for the 27 countries of the European Union, which guarantees "the integrity of the single market" and ensures "consistency in the supervision of the banks of all 27 member states". It will then be up to the national supervisory authorities "to prepare and implement the decisions of the ECB".
From 2013 January XNUMX, the ECB will be able to decide, at its discretion, to take over the supervision of any bank in the euro area but any institution that wishes can ask to join the single surveillance spontaneously by collaborating with the ECB. From 2013 July XNUMX, however, "all banks with the highest systemic importance" will be supervised by the Central Bank. Then from 2014 January XNUMX, single supervision will be extended to “all banks” in the Eurozone.
It will also create a separate board to separate monetary policy tasks from those of banking supervision in order to eliminate potential conflicts of interest. A president and a vice president will be elected from the ECB council and 4 representatives will be chosen for each national authority. The costs will also be part of a separate budget line from the general one of the ECB.
Countries that do not use the euro can participate in the single surveillance, but on the condition that they commit themselves to "close cooperation" with the ECB and to implement its decisions: the Eurotower will decide whether these conditions are met.
The EU Commission has guaranteed that national supervisory authorities will continue to have a "central" role, although they will not have the final say “on all functions related to financial stability”. They will have to assist the ECB, they will be its "agents" and will have to carry out checks "day by day". The president of the Abi Giuseppe Mussari has already expressed himself favorably regarding the decision of the EU Commission: "We believe that from a common and equal legislation for all, the Italian banks have everything to gain in terms of competitiveness compared to their European competitors", explained the president of the Italian Banking Association, "It is evident however that a territorial bank with 15, 20 branches cannot be asked for the same architecture of controls and checks that is asked of a much larger bank”, he added.
Lastly, as far as the EBA is concerned, the institute remains the regulator of the EU banking system, responsible for the stress tests, and will also have to develop a "single supervisory manual" for all 27 member states, trying to bring together the practices of supervision in the EU.
The first meeting of eurozone finance ministers, at which the topic of banking supervision will be central, is expected in Cyprus on Thursday and Friday 14-15 September.
