(Adds Bundesbank's Dombret, Germany's Schaeuble)
FRANKFURT Feb 28 The new banking supervision
housed in the European Central Bank must be accompanied by a
single mechanism to deal with failing banks, ECB Executive Board
member Sabine Lautenschlaeger said on Friday.
From November, the ECB will supervise directly around 130 of
the bloc's top lenders as part the European banking union that
aims to create a more level playing to make banks more resilient
for future crisis.
The rest of the roughly 6,000 euro zone banks will remain
under the brief of national supervisors, though the ECB will
have powers to intervene if it deems necessary.
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.
Lautenschlaeger said in a panel discussion at a Bundesbank
conference that a bank resolution mechanism needed to be
established over the next couple of years, "because one cannot
do European supervision and promote resolution on national
levels. That's is simply a no-go".
In closing remarks at the same conference, Bundesbank board
member Andreas Dombret called on euro zone countries to agree on
a resolution mechanism soon.
"How can a European supervisory body be credible if it
cannot resolve a bank when necessary?" Dombret asked.
"Thus, I appeal to those involved in the negotiations to
reach an agreement on the European Single Resolution Mechanism
prior to the European elections in May," he added.
Earlier, German Finance Minister Wolfgang Schaeuble told the
conference he did not expect euro zone finance ministers to
agree a compromise on a bank resolution mechanism when they meet
early next month.
"Surely not - that would be against any experience. We will
find it as soon as it is needed, not before," Schaeuble said.
(Reporting by Sakari Suoninen; Writing by Paul Carrel)