Asmussen warns that banking body won’t kick off until 2014

City A.M. Reporter
THE NEW European banking supervisory body, to be set up under the roof of the European Central Bank, will not be ready to operate fully before 2014, an ECB executive board member said yesterday.

Making the ECB the supervisor for lenders chiefly in the 17 countries that use the euro would be the first of three pillars in a banking union and one EU leaders had committed to complete by this year, at least on a legal basis.

Joerg Asmussen, one of the ECB's key negotiators for a closer integration of the Eurozone, said he was confident that a meeting of finance ministers on Tuesday could deliver basic political agreement on the matter.

"After that there will be considerable work on details and implementation and realistically I expect that the European banking supervision will not be able to operate fully before the beginning of 2014,” Asmussen said in a speech to be given at the annual reception of the Association of German pfandbrief banks.

Alongside the supervisory body, a resolution and restructuring mechanism to shore up or wind down troubled banks should set up as soon as possible, Asmussen said.