February 28, 2014 / 9:47 AM / in 4 years

ECB's Lautenschlaeger: European supervision needs single resolution

FRANKFURT, Feb 28 (Reuters) - 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”.

Reporting by Eva Taylor and Sakari Suoninen

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