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MAKE MONEY BLOG $, STRASBOURG. The European Central Bank or the European Central Bank (ECB) will be the primary supervisor for all banks in the euro zone for a total of 6,000 banks. This plan will apply in 2014 and will be a stepping stone towards full union banking establishment.
The blueprint was the plan of the European Commission released on Wednesday (12/9). It became part of the grand plan to prevent banks that are now dealing with debt, such as Bankia Spain. That way, the euro zone countries was trapped government debt crisis because they borrowed money to rescue banks.
European Commission President Jose Manuel Barroso deliver banking reform proposals also imply further European fiscal integration. The proposal needs the approval of all member states of the European Union.
According to him, a single oversight ECB will address the basic elements of the European banking crisis since the attacks nearly five years ago.
"The crisis shows when a cross-country bank, rules and supervision remain in the country. We need to move into supervision with the euro area, "he said.
Single monitoring mechanism would establish a new architecture of European banks with a central role in the hands of the ECB. "The ECB will oversee all banks in the euro area," he said.
Are all the states happy with that plan?
Submit supervision to the ECB with a state delegate powers to oversee national financial industry. The proposal has not-yet been created tension in German and English.
Britain is outside the euro zone and would not follow that scheme. Even so, many international banks operating in London Eurozone. These banks would be affected by the ECB supervision.
Britain was also concerned that the ECB with new power will run the new regulations that could rival the position of London as the financial capital of Europe's de facto.
"We have said that the banking union for the euro area should also respect the integrity of the single market for the whole of the European Union," said a spokesman for the UK Treasury.
However, the European Commission and disclaim fixed pitch sensitivity of the issue. They actually recommend a specific voting mechanism between the EU as a counterweight to the power regulator in the eurozone.
Stage by stage union banking
There are three stages to a banking union.
First, the ECB gets the reins of power to monitor all banks in the euro zone and other EU wider supervision and approves it.
Second, the establishment of mutual funds are required in closing troubled banks.
Thirdly, the scheme meet to protect all citizens savings and time deposits of all citizens in the Euro zone.
Establish a common framework to address banking problems will be a new beginning of chaos euro banks in 17 countries. This chaos has fueled the crisis and raise the cost of borrowing in countries that are weaker.
Handed over power to the ECB supervision will also open the possibility of direct aid to banks of the euro zone's emergency fund, the European Stability Mechanism (ESM).source: kontan.co.id
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