November 29, 2017 / 1:14 PM / 2 years ago

EU Commission proposes renewal of mandate for chair of bank watchdog SRB

BRUSSELS, Nov 29 (Reuters) - The European Commission proposed on Wednesday to extend for five years the mandate of Elke Koenig, the German head of the European Union’s body in charge of disposing of failing banks.

Koenig, who has chaired the Single Resolution Board (SRB) since its creation in 2014, currently has a three-year mandate that expires in December.

The Commission’s proposal needs to be confirmed by the European Parliament. Lawmakers plan to hold a hearing with Koenig on Monday, according to a draft agenda of the assembly’s economic committee.

Koenig’s nomination is coinciding with decisions on other top economic jobs in the euro zone, which entail fierce behind-the-scenes horse-trading among the bloc’s 19 member states.

On Monday, the Eurogroup of euro zone finance ministers is expected to appoint a new chair as the term of Jeroen Dijsselbloem comes to an end. Before May, EU leaders will also have to replace the outgoing vice president of the European Central Bank, Vitor Constancio.

Koenig has overseen this year the first wind-down of a euro zone bank under new rules aimed at reducing taxpayers’ costs when lenders fail.

The SRB’s decision, together with the EU Commission, to force in June the sale of Spain’s ailing Banco Popular to rival Santander has sparked a record number of lawsuits from bondholders who have seen their investment wiped out in the process.

Koenig has also championed strict capital requirements for euro zone banks under her watch to make sure they hold sufficient buffers that would be written off, or bailed-in, if they face collapse. (Reporting by Francesco Guarascio; Editing by Toby Chopra)

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