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German court clears ECB's supervision of top banks

FILE PHOTO - Sign of the European central Bank (ECB) is seen ahead of the news conference on the outcome of the Governing Council meeting, outside the ECB headquarters in Frankfurt, Germany, March 7, 2019. REUTERS/Kai Pfaffenbach

FRANKFURT (Reuters) - Germany’s Constitutional Court on Tuesday rejected a challenge to the European Central Bank’s authority to supervise the euro zone’s biggest banks, dismissing yet another German objection to the central bank’s powers.

The court said that ECB’s Single Supervisory Mechanism and the EU’s separate Single Resolution Mechanism, used to close unviable banks, were both in line with German law and did not constitute an overreach of EU powers.

The suit, brought by academics, including law professor Markus Kerber, follows several other failed challenges of ECB power, including its right to buy government bonds.

Reporting by Frank Siebelt, Writing by Balazs Koranyi, Editing by William Maclean