By TraderVox.com
Tradervox.com (Dublin) – European Union Finance Chiefs met to discuss the European Central bank financial oversight, which is aimed at fighting the debt crisis in the region and protecting the region from another crisis. The supervisory body will also be mandated to reach out to non-eurozone countries. The countries are yet to reach a consensus on how the ECB supervisor will apply to smaller banks and the supervisory voting procedures. The finance chiefs are also tasked with the responsibility of formulating how the oversight will work with the non-euro members.
According to Anders Borg, the Swedish Finance Minister, the finance chiefs will be seeking to agree on the equal terms for the eurozone and non-eurozone countries. The Swedish Finance Minister also stated that the finance chiefs could meet again this month to finalize plans on the issue before the year ends. The EU leaders had indicated their intentions to have the issue concluded before the year end. Borg also mentioned the possibility of technical treaty change to accommodate the oversight but ECB lawyers have indicated that it is not necessary.
In their meeting in October, EU heads of governments indicated their intention to have the joint supervisor, as this will help break the bank-sovereign link that has contributed to the debt crisis in the region. The ECB oversight will be a mandatory prerequisite for euro area members to tap directly to the region‘s firewall fund. Leader in the region have stated that if finance ministers fail to agree before the year end, it will be impossible to have a political framework in place by January 1. EU leaders will meet mid this month to discuss broader banking issues as they leave the oversight issue to region’s finance chiefs.
According to French Finance Minister Pierre Moscovici, there is need for practical arrangements to be in place for the ECB to supervise all banks in the euro zone including the smaller local banks.
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