Europe (Germany in fact) clinched a deal on Thursday to give the European Central Bank new powers
to supervise euro zone banks from 2014, embarking on the first step in a new
phase of closer integration to help underpin the euro. After more than 14 hours
of talks and following months of tortuous negotiations, finance ministers from
the European Union’s 27 countries agreed to hand the ECB the authority to
directly police at least 150 of the euro zone’s biggest banks and intervene in
smaller banks at the first sign of trouble. “This is a big first step for
banking union,” EU Commissioner Michel Barnier told a news conference. “The ECB
will play the pivotal role, there’s no ambiguity about that.” The euro rose to
a session high in Tokyo of 1.3080 against the U.S. dollar on news of the deal.
After three years of piecemeal crisis-fighting measures, agreeing on a banking
union lays a cornerstone of wider economic union and marks the first concerted
attempt to integrate the bloc’s response to problem banks. The new system of
supervision should be up and running by March 1, 2014, following talks with the
European Parliament, although ministers agreed that could be delayed if the ECB
needed longer to prepare itself. The plan sets in motion one of the biggest
overhauls of any European banking system since the financial crisis began in
mid-2007 with the near collapse of German lender IKB. The focus is now on EU
leaders, who meet in Brussels on Thursday and Friday, to give it their full
political backing. In an about-turn, German Finance Minister Wolfgang Schaeuble
dropped earlier objections that had led him to clash openly with his French
counterpart, Pierre Moscovici, last week over the ECB’s role in banking
supervision. With time running out to meet a year-end deadline, both sides
managed to settle their differences and Germany won concessions to temper the
authority of the ECB’s Governing Council over the new supervisor. Agreement on
bank surveillance is a crucial first step towards a broader banking union, or
common euro zone approach to dealing with failing banks that in recent years
dragged down countries such as Ireland and Spain. The next pillar of a banking
union would be the creation of a central system to close troubled banks. The
decision also sends a strong signal to investors that the euro zone’s 17
members, from powerful Germany to stricken Greece, can pull together to tackle
the bloc’s problems.
Access Investments-Building Awareness - European Union-ROMANIA
Thursday, December 13, 2012
Winning the war against the people of Europe ...
Europe (Germany in fact) clinched a deal on Thursday to give the European Central Bank new powers
to supervise euro zone banks from 2014, embarking on the first step in a new
phase of closer integration to help underpin the euro. After more than 14 hours
of talks and following months of tortuous negotiations, finance ministers from
the European Union’s 27 countries agreed to hand the ECB the authority to
directly police at least 150 of the euro zone’s biggest banks and intervene in
smaller banks at the first sign of trouble. “This is a big first step for
banking union,” EU Commissioner Michel Barnier told a news conference. “The ECB
will play the pivotal role, there’s no ambiguity about that.” The euro rose to
a session high in Tokyo of 1.3080 against the U.S. dollar on news of the deal.
After three years of piecemeal crisis-fighting measures, agreeing on a banking
union lays a cornerstone of wider economic union and marks the first concerted
attempt to integrate the bloc’s response to problem banks. The new system of
supervision should be up and running by March 1, 2014, following talks with the
European Parliament, although ministers agreed that could be delayed if the ECB
needed longer to prepare itself. The plan sets in motion one of the biggest
overhauls of any European banking system since the financial crisis began in
mid-2007 with the near collapse of German lender IKB. The focus is now on EU
leaders, who meet in Brussels on Thursday and Friday, to give it their full
political backing. In an about-turn, German Finance Minister Wolfgang Schaeuble
dropped earlier objections that had led him to clash openly with his French
counterpart, Pierre Moscovici, last week over the ECB’s role in banking
supervision. With time running out to meet a year-end deadline, both sides
managed to settle their differences and Germany won concessions to temper the
authority of the ECB’s Governing Council over the new supervisor. Agreement on
bank surveillance is a crucial first step towards a broader banking union, or
common euro zone approach to dealing with failing banks that in recent years
dragged down countries such as Ireland and Spain. The next pillar of a banking
union would be the creation of a central system to close troubled banks. The
decision also sends a strong signal to investors that the euro zone’s 17
members, from powerful Germany to stricken Greece, can pull together to tackle
the bloc’s problems.
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TOP OF THE AGENDA
Europe's banking system will be firmly in the spotlight today after a marathon session of EU finance ministers finally agreed to hand the ECB the authority directly to police the eurozone's biggest banks - and to intervene in smaller lenders at the first signs of trouble.
After more than 14 hours of talks, the deal was struck at around 4am and sets in motion one of the biggest overhauls of the European banking system since the financial crisis began in mid-2007 with the near collapse of German lender IKB.
The pressure is now on EU leaders, who meet in Brussels today and Friday, to give their full political backing - after months of Franco-German wrangling over the deal. In a dramatic U-turn, German Finance Minister Wolfgang Schaeuble ditched his earlier objections that had led him to clash publicly with his French counterpart, Pierre Moscovici. Non eurozone countries, such as Britain and Sweden, have negotiated certain get-outs to check the ECB's powers over their banks. But the devil will be in the detail.
We have the story here and there will be updates throughout the day.
Meanwhile, eurozone finance ministers meet to discuss Greece and Cyprus. The Eurogroup announced last month that it expects to be able to pay the latest tranche of bailout money to Greece by today after an agreement was reached between the EU-ECB-IMF Troika and Greece on the conditions. Finance ministers will also chew over how much help Cyprus may need.
Away from Europe, the fat lady is still clearing her throat at HMV, which has narrowed pre-exceptional operating losses from £33.1m to £24.1m in the first half but warned that "current market trading conditions result in material uncertainties facing the business". As such there will be a "probable covenant breach at the end of January 2013", though talks with the banks are "constructive". As we disclosed earlier this week, music suppliers are rallying around with about £40m of funding to maintain a shop window for their acts.
In a dramatic about-turn, German Finance Minister Wolfgang Schaeuble ditched his earlier objections that had led him to clash openly with his French counterpart, Pierre Moscovici, last week over the ECB's role in banking supervision.
With time running out to meet a year-end deadline, both sides managed to settle their differences and Germany won concessions to temper the authority of the ECB's Governing Council over the new supervisor.
Agreement on bank surveillance is a crucial first step towards a broader "banking union," or common euro zone approach to dealing with failing banks that in recent years dragged down countries such as Ireland and Spain.
The next pillar of a banking union would be the creation of a central system to close troubled banks.
The decision also sends a strong signal to investors that the euro zone's 17 members, from powerful Germany to stricken Greece, can pull together to tackle the bloc's problems.
The Independent: Leading executives at Deutsche Bank have been drawn into a carbon permits tax investigation after raids on the Berlin, Dusseldorf and Frankfurt offices of Germany's biggest lender.
The Daily Mail: Facebook has been accused of creating 'tomorrow's generation of problem gamblers' by rolling out real money casino games through its deal with gaming group 888.
The Times(£): Britain's contribution to the European budget over the past 50 years will top £100bn next year after a fresh wave of spending increases was agreed in Brussels yesterday.
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