The EU member states have just reached a deal to grant the ECB oversight of roughly 200 EU banks. That is a small fraction of the roughly 6000 that would have been supervised under the original plan that the Commission proposed.
The most important features are still to be determined, but the ECB has stated clearly that it would require extensive powers to make the project work. For the goal, as far as the ECB is concerned was to establish some type of banking union that would mean forced mergers and takeovers, the power to take away ownership rights from shareholders (some of who are member states themselves), engage in other forms of strenuous intervention, and be responsible for all banks, getting beyond the myth that only large institutions can cause systemic failure.
The agreement in principle this morning is not yet a banking union. There will be further international negotiations that appear fated to water down the powers even further than they have been already, and the legal challenges have already been flagged.
The most important features are still to be determined, but the ECB has stated clearly that it would require extensive powers to make the project work. For the goal, as far as the ECB is concerned was to establish some type of banking union that would mean forced mergers and takeovers, the power to take away ownership rights from shareholders (some of who are member states themselves), engage in other forms of strenuous intervention, and be responsible for all banks, getting beyond the myth that only large institutions can cause systemic failure.
The agreement in principle this morning is not yet a banking union. There will be further international negotiations that appear fated to water down the powers even further than they have been already, and the legal challenges have already been flagged.
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