(Recasts with detail on bank resolution, adds background)
BRUSSELS Jan 31 Sabine Lautenschlaeger, an ECB
policymaker in the running to become the No. 2 at the new
European banking watchdog, urged EU negotiators to agree swiftly
on a shared mechanism for closing down insolvent banks.
Lautenschlaeger said all banks under the direct or indirect
watch of the ECB's Single Supervisory Mechanism (SSM) should
fall under the joint resolution mechanism.
She also said public backstops should be in place by the
time the ECB starts supervising euro zone banks from November,
to ensure that possible fallouts from the preceding bank balance
sheet review can be handled in an orderly way.
"A European supervisory structure needs a European
restructuring and resolution regime," Lautenschlaeger said in
written responses to questions from members of the European
parliament, where she is due to attend a hearing Monday.
EU countries and the bloc's parliament are attempting to
seal final agreement on a scheme to tackle failed banks within
the coming weeks. Time is running out with the parliament due to
disband shortly before elections in May.
"The remaining gaps have to be closed soon for the banking
union to operate effectively," Lautenschlaeger said, calling for
the single resolution mechanism regulation to be adopted by the
end of April when the current legislative cycle finishes.
Lautenschlaeger was in charge of banking supervision at
Germany's Bundesbank before she joined the European Central Bank
this week as an executive board member.
She also said the that if possible the period of ten years
for moving towards a single resolution fund should be shortened,
echoing similar comments from her ECB colleague Benoit Coeure.
A senior lawmaker in Chancellor Angela Merkel's coalition
partner said as much on Friday, wanting the euro zone to move
faster in setting up a common fund to tackle failing
(Reporting by Tom Koerkemeier and John O'Donnell in Brussels,
writing by Eva Taylor and Sakari Suoninen in Frankfurt; Editing
by Ruth Pitchford)