Matina Stevis & Stephen Fidler
Senior euro-zone finance officials, moving ahead on a plan to create a single overarching bank supervisor for all the countries in the 17-nation currency bloc, are settling on a framework that would create a new agency reporting to the European Central Bank to police the largest banks in the currency union, people involved in the discussions said.
Euro-zone leaders mandated the regional supervisor’s creation at a summit here in June, a significant step toward creating a future banking union among the countries that use the currency.
The establishment of a single authority, with a single set of rules for the region’s banks, is seen by Germany and other strong economies as an essential condition before they will consider sharing resources with other euro-zone countries.
Disclosing the first details of how the discussions on setting up the entity were progressing, officials involved said the talks were coalescing around the idea of creating an agency under the ECB that would be charged with sole supervision of the top 25 or so largest banks.
They said smaller euro-zone banks would remain under the purview of their national financial-market regulators. But these national regulators would be brought under the control of the euro-zone supervisor, which could be based in Brussels rather than Frankfurt, the ECB’s home.
Although the summit statement said euro-zone finance ministers would flesh out their decisions at a meeting in Brussels Monday, officials from some of the 17 governments said they don’t expect ministers to advance the proposals much there.
One of the few areas where they are expected to make significant progress is the details of as much as €100 billion ($122.8 billion) of aid Spain has requested to recapitalize its banks.