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ECB gets supervisory powers as Europe moves ahead with banking union

ECB gets supervisory powers as Europe moves ahead with banking union
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The European Parliament has given the European Central Bank new powers to supervise up to 6,000 of the eurozone’s banks.

ECB President Mario Draghi called it a “real step forward in setting up a banking union” for the region.

Economic and monetary affairs committee member Philippe Lamberts, who has been very critical of the banks and led a campaign against bankers’ big bonuses, told euronews this is a good move.

“When Deutsche Bank was overseen by Germans, BNP Paribas by the French, or Fortis by the Belgians, they were more tolerant. To ensure that our major banks – which still rely on the taxpayers to rescue them – are managed properly and in the public interest, we need efficient supervision. This is what we want to do with the banking union, to establish a European supervisor to monitor the entire euro area banking sector and all the countries that join the euro area, and those who want to take part in this initiative,” Lamberts said.

The ECB is due to become the new banking supervisor from the second half of 2014.

The next step in the banking union is the setting up of an authority to wind down failed banks and a fund to protect savers’ deposits.

But not everyone is happy, Germany has tried to limit the scope of the ECB’s supervision and the independent authority worried that it will end up footing the bill.