The European Union's banking regulator should be given freer rein to forge a more integrated banking system and preserve the bloc's single market, the watchdog's chairman has said. In a speech that will be seen as call for more independence by some regulators, Andrea Enria said the London-based European Banking Authority (EBA) should be allowed to take decisions on technical issues in limited areas on its own.
Banking and regulatory officials have speculated privately on the future of the cash-squeezed EBA now that a banking union has been created with a far better resourced European Central Bank supervising euro zone lenders. Currently, decisions taken by EBA, which writes pan-EU rules to flesh out banking laws, need endorsement from the EU's executive European Commission, which can slow things down.
"The EBA's regulatory mission of levelling the playing field needs to be further reinforced," Enria said in a speech in Italy on Monday and released to the media on Tuesday. EBA could also act as a bridge between those who are in the euro zone and those who are outside, and ultimately preserve the unity and integrity of the bloc's single market, he said. "What I said so far could be seen as the quest for power by an authority, for its own sake," Enria said.
But the banking union and continued fragmentation of markets in the EU is injecting a sense of urgency into the need to deepen harmonisation of rules across the whole of the EU, Enria said. "Focusing only on the euro area would hamper the integrity of the single market," Enria added. His words will find favour in Britain which plans to hold a referendum on its membership of the EU and wants safeguards to stop euro zone countries, via the ECB, from imposing rules on the UK banks. Britain failed to stop the EU introducing a cap on bankers' bonuses. Revised voting rules at the EBA seek to avoid Britain being outvoted, but its financial sector worries that as more countries join the banking union, these safeguards will become untenable.
Comments
Comments are closed.