December 10, 2012 / 1:02 PM / 5 years ago

EU presidency plan seeks to ease concern over banking union

LONDON, Dec 10 (Reuters) - The European Central Bank would only supervise euro zone banks on a day-to-day basis if they had assets of more than 30 billion euros, European Union president Cyprus said in a draft compromise aimed at easing German concerns.

The bloc’s finance ministers meet on Wednesday to try and broker a deal on the first step towards a banking union, for their leaders to endorse at a summit in Brussels on Thursday and Friday.

Germany only wants the ECB to supervise larger banks, while France and other member states say it should have powers to intervene in any lender.

The compromise proposes that a euro zone bank would not be considered “significant”, meaning it would come under direct ECB oversight, unless it had assets worth more than 30 billion euros ($39 billion), or assets worth more than a fifth of the home country’s economy, or the bank operated in at least three euro zone countries.

The ECB, however, could still “at any time, on its own initiative or upon request by a national competent authority” decide to intervene directly in a euro zone bank that was deemed not to be significant.

The Cypriot plan also seeks to smooth Britain’s concerns that the ECB could use its clout as a supervisor to harm the UK financial services sector, the EU’s biggest and which will not be part of the banking union.

The draft says the Frankfurt-based central bank could not discriminate against any member state for the provision of banking or financial services in any currency.

Britain has taken the ECB to the European Court of Justice to try and quash an ECB policy of requiring clearing houses that handle large amounts of euro denominated business to be based in the euro zone.

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