EU moves to single banking supervision

European ParliamentThe European Union is moving closer to a single supervisory system for banks, having approved draft laws in a plenary vote in the European Parliament on Wednesday.

Under the draft law the European Central Bank (ECB) would supervise the eurozone’s largest banks directly. It would also have a say in the supervision of other banks.

In a statement, the European Parliament says the members who drafted the laws insisted that accountability rules must match the supervisory powers created at, or transferred to, EU level.

“The ECB, in its supervisory role, will therefore have to be much more open and accountable than for its monetary policy one,” the statement says.

The key changes centre on stronger accountability of the supervisor, a stronger role for national parliaments and better access to documents for supervisory authorities. It is also meant to encourage participation for non-eurozone countries, establish a strict division of ECB staff between monetary policy and supervision roles, and strengthen the role of the European Banking Authority.

National parliaments will now have the opportunity to express their views. Final approval of the draft law will be “in the near future”.

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