20 September 2012
On 12 September 2012, the European Commission published a proposal giving the European Central Bank supervisory responsibility for all banks in the Eurozone.
Common supervision is intended to lead to common fiscal responsibility for banks, break the link between governments and their banks and so tackle the sovereign debt crisis in the Eurozone. The proposal needs to be credible, legally robust, provide for effective supervision and, as it needs to be unanimously adopted by all Member States in the EU not just the Eurozone, it needs to be politically acceptable. Further legislative proposals creating a single European regulator and a form of compulsory burden-sharing under which there would be effectively common funds, paid for by the banks themselves, to guarantee deposits and for resolution financing were expected but it appears that opposition from some Member States has derailed the Commission's legislative plans in this area.