Summary Can now speed up work on a wider framework to prevent failing lenders collapsing the economy.
LUXEMBOURG (AFP) - The EU has made headway on its new bank supervision regime and can now speed up work on a wider framework to prevent failing lenders collapsing the economy, officials said Monday.
European Central Bank executive board member Joerg Asmussen said officials had made recent progress on sticking points holding up the Single Supervisory Mechanism.
"We are very confident that European Union finance ministers can now agree the legal basis for the SSM," Asmussen said.
"We can (now) really speed up preparations ... (for) a Banking Union," he said, referring to the regime to supervise and if necessary close European banks before they can damage the economy.
Asmussen did not detail what the problems had been but EU and UK sources said the issue was British reservations over the SSM.
Non-euro Britain is home to the European Banking Authority, which is supposed to oversee all banks in the bloc, while the SSM is to be run by the ECB.
Britain, jealous to safeguard the interests of London as one of the world s biggest financial centres, had been concerned that the SSM could in practice control the EBA given that the 17 eurozone members would likely vote as a bloc.
To avoid this, it secured agreement in December that there would have to be a double majority in both the SSM and the 11 non-euro members grouped in the EBA on any action.
A UK diplomatic source said London had won fresh assurances that this would be the case and accordingly, EU finance ministers could clear the SSM when they meet here Tuesday.
The SSM is to be complemented by a Single Resolution Mechanism and a Deposit Guarantee regime to complete the Banking Union.
This is meant to provide a comprehensive, single regulatory framework to prevent taxpayers having to mount the disastrously expensive bailouts which led to the years of austerity and recession the eurozone is only now emerging from.
