Banking supervision powers transferred to the EU level must be matched by measures that subject them to democratic scrutiny, said Economic and Monetary Affairs Committee MEPs on Thursday. They voted on plans to confer banking supervision powers on the ECB and ways to better integrate non-Eurozone countries into the new banking supervision system.
The committee kept to its pledge to vote its position on EU banking supervision rules on time. The vote gives its negotiating team a strong mandate to hammer out a deal with the Council, which is expected to adopt its negotiating position at the 4 December ECOFIN meeting.
“We have adopted a constructive position today: banks in trouble will be able to access funds, non-Eurozone countries will have equal rights, and we have kept to our deal by delivering our position on time”, said rapporteur on ECB supervisory powers Marianne Thyssen (EPP, BE) after the vote.
“Our package sends clear signals.We want a more inclusive system, a strong supervisor,
recognition that there are different types of banks, and democratic accountability”, said rapporteur on changes to the European Banking Authority (EBA) Sven Giegold (Greens, DE), adding that the ball was now in the Council’s court.
The Commission proposal would make the ECB supervisor responsible for all the Eurozone’s 6,000 or so banks, with help from national supervisors. The committee position stipulates that the ECB would be most directly involved with banks receiving public assistance and those posing a systemic risk, whereas other banks would be supervised by national authorities monitored by the ECB. Draft supervisory decisions by national authorities would be deemed adopted by the ECB unless it rejected them. However the ECB would always have the power to undertake direct supervision of a bank if it felt the need to.
New supervisor, new accountability
The legislation as proposed by the Commission would give sweeping supervisory powers to the ECB, at least over banks in the Eurozone. The committee voted to balance these powers by strengthening the accountability provisions so as to impose strong controls on the ECB’s supervisory arm.
Most importantly, the position voted today would allow MEPs to hold inquiries into alleged failures of the ECB supervisor. It would also require that the Chair of the supervisory board be approved by the European Parliament. National parliaments and the European Parliament would moreover be entitled to hold hearings with representatives of the Supervisory Board.
The text also provides for the setting up of a Board of Appeal to hear complaints by parties with grievances arising out of ECB supervisor decisions.
An inclusive system
As the Commission’s original proposal prompted fears that the single market could be fractured and that non-Eurozone countries would have no say, the text adopted today places non-Eurozone countries and their banks in a stronger position to take part in the proposed single supervisory mechanism (SSM).
Today’s position would also give all countries taking part in the system equal voting rights in the ECB Supervisory Board. Moreover, the ECB Governing Council, the only body where non-Euro countries cannot participate, would not have the power to change proposed Board decisions. Instead, it could only ask the Board to submit a new decision. This would allow non-Eurozone countries to retain influence over decision making at all times.
The position also provides for various degrees of involvement of non-Euro countries with the ECB supervisor, ranging from “close cooperation”, through signing memoranda of understanding, to remaining outside the SSM but still interacting with it.
Finally, MEPs changed the proposed voting arrangements within the EBA so as to reduce inequalities between countries within the SSM and those outside.
Parliament is now ready to start negotiations with member states to hammer out a deal on the two texts. Talks could begin next week, if the Council gives the Cyprus Presidency its negotiating mandate in time.
In the Chair: Sharon Bowles (ALDE, UK)