Econintersect: German finance minister Wolfgang Schauble has thrown a big bucket of cold water on the flickering flame of movement toward a Eurozone banking union. He suggested that a revision of EU treaties would be required to bring all of Europe's banks under a single supervisor. If his view were to prevail it would provide more than a slowdown; it would be a dead stop. Treaty revisions typically take years to accomplish. The quick implementation of a single banking supervisor is pushed by its proponents as a means of restoring confidence in the EU's distressed financial system.
Follow up:Among those expressing concern about the new position taken by Schauble were ECB (European Central Bank) officials. From the Financial Times:
Vítor Constâncio, the vice-president of the European Central Bank, said the promise to deliver banking supervision reforms “quickly” was an “important element for credibility for the euro area”.
“I want to stress that if that would not happen that would be bad in terms of market reactions,” he said.
Sweden is also opposed to quick movement to establish a banking union as the CNN video below featuring Swedish finance minister Anders Borg illustrates. Borg emphasizes a point that Schauble also raises. They both maintain there must be a "firewall" between bank supervision and ECB monetary policy implementation.
- Schäuble puts brake on bank union plan (Alex Barker and Peter Spiegel, Financial Times)