EU Commissioner Michel Barnier yesterday said that eurozone banks would gradually come under the remit of a new common supervisor with a complete shift over for all 6,000 lenders on Jan. 1, 2014.
Barnier is leading preparations for plans for a common supervisor, which was part of a wider agreement on letting the new eurozone rescue fund directly rescue lenders instead of forcing countries to seek a full bailout.
There are disagreements between the 17 eurozone members as well as the wider EU over how fast and how far to centralize the current system which relies on national supervisors.
“We never envisaged a global switchover from one day to the next to direct and integrated supervision,” Barnier, the EU’s internal markets commissioner, was quoted as saying in the French business daily Les Echos.
He said any banks that receive support from the European Stability Mechanism rescue fund should immediately come under the purview of the new regulator, which is hoped will begin operations on Jan. 1 next year.
“From that date, theoretically, the direct recapitalization of banks by the rescue fund will be possible,” Barnier said.
Then the common supervisor would take over responsibility for the largest so-called systemically important banks, and finally all 6,000 eurozone banks from Jan. 1, 2014.
EU Commission President Jose Manuel Barroso is to present the proposals on Sept. 12, with the European Central Bank (ECB) expected to be handed the bank supervisor role.
Meanwhile, French Finance Minister Pierre Moscovici on Thursday insisted on the key role of the ECB in putting an end to the market instability endangering the eurozone.
“It is fundamental that we find the rules that will allow markets to stop fluctuating,” Moscovici told a business conference outside Paris.
“It is for that reason that we must find solutions with the ECB,” he said.
In his speech, Moscovici reiterated his attachment to the “integrity” of the eurozone, warning of the consequences of Greece leaving the eurozone.
“I believe in the eurozone,” he said. “I am not one who thinks that the exit of a country like Greece would be innocent or harmless.”