ECB welcomes deal on EU banking supervisor
(FRANKFURT) - European Central Bank President Mario Draghi welcomed Thursday a European Union agreement to create a bank supervisor to oversee lenders across the eurozone.
"Mario Draghi, president of the ECB, welcomes the agreement on the Single Supervisory Mechanism (SSM)" reached by eurozone finance ministers.
"The agreement marks an important step towards a stable economic and monetary union, and towards further European integration," the central bank said in a statement.
Under a complex deal hammered out following marathon talks overnight, EU finance ministers agreed on the creation of a common supervisory authority in a key step towards a banking union which EU leaders hope will ring-fence banks in trouble to prevent future crises.
It will allow eurozone banks to be recapitalised directly, rather than through governments, so as to avoid adding to their growing debt burden.
The ECB will be entrusted with managing the supervisory system in tandem with the London-based European Banking Authority, which covers all 27 EU states, and national supervisors.
From March 2014, banks with assets worth more than 30 billion euros ($39 billion) or equal to 20 percent of a state's economic output will come under the ECB's remit.
The ECB will also have the right to intervene in cases involving smaller banks but it is expected that national supervisors will have the main responsibility in this category.
"Following a successful conclusion of the trialogue between the European Parliament, the (European) Council and the European Commission, and after the adoption of the legal acts, the ECB will launch the preparations so that the SSM can be established within the timeline foreseen" by finance ministers, the ECB statement added.