German Finance Minister Wolfgang Schaeuble this morning rejected a European Commission plan to give the European Central Bank (ECB) sweeping powers to monitor all Eurozone banks, saying it should instead focus only on systemically important institutions.
The Commission's plans to give the ECB the power to oversee all banks is intended as a first step towards a full European banking union. The EU executive body is due to publish its detailed proposals on banking supervision on 12 September.
"The ECB has itself said it does not have the potential to supervise the European Union's 6,000 banks in the forseeable future," Schaeuble said, expressing scepticism about the timeframe envisaged in the Commission proposals.
"I have doubts that this (banking supervision) can come so fast," he said, adding that a distinction should be drawn between smaller banks and systemically relevant institutions.
"With the bigger, systemically relevant banks there is a chance that direct supervision by the ECB could be realised in a forseeable period of time," Schaeuble said.
EU Commissioner Michel Barnier's plan would rob national supervisors of much of their authority, leaving them with routine tasks such as consumer protection. But Eurozone countries must approve the proposal before it becomes law.
City A.M. Reporter