Europe advances towards single banking supervisor

European Union leaders took a big stride towards establishing a single banking supervisor for the euro zone, striking a deal under which the bloc's rescue fund could start recapitalising ailing banks next year, a French government source said.

The source told reporters at an EU summit that all 6,000 banks in the single currency area would come under European Central Bank supervision by 2014, but most day-to-day oversight would be delegated to national bodies.

Creating an effective banking union, for which this deal is just a first step, is regarded by the International Monetary Fund and market economists as a key step to overcome the euro zone's three-year-old debt crisis.

The French source said the agreement meant the European Stability Mechanism (ESM) could start injecting capital into troubled banks as early as the first quarter of 2013, but a German source said it was "very unlikely" to happen so soon.

Read Full Article from Reuters

- Posted: 2012-10-21 00:06:24

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