The heads of the European Parliament and European Central Bank (ECB) on Tuesday night (10 September) reached an agreement on transparency rules for the new bank supervisor which is to be created next year and which is to oversee the activity of the eurozone’s 150 largest banks.
The European Parliament had postponed its vote, initially scheduled for Tuesday, while demanding more access to information about internal meetings at the new supervisor, to be set up within the ECB.
Martin Schulz, head of the EU legislature, wanted the ECB to provide MEPs with detailed minutes of the supervisors’ meetings, while the Frankfurt-based bank said this would limit its independence.
ECB chief Mario Draghi first only offered “summaries” of the meetings, but in the end accepted to give a select group of MEPs, bound by secrecy rules, “very detailed” accounts of internal talks.
Under the deal, if the board of the ECB decides to reject a decision by the new supervisor, the parliament chief and the head of the relevant parliamentary committee will have to be informed in confidence.
The head of the bank supervisor will be appointed by member states and the European Parliament and they will both have the power to recall that person from the job.
Tuesday’s informal agreement paved the way for a vote in the European Parliament on Thursday, a first step to creating the new authority called Single Supervisory Mechanism (SSM).
Southern European states are keen on seeing this supervisory body set up as soon as possible, because Germany has made this a precondition to agreeing that the eurozone bailout fund is tapped directly by troubled banks in the south.
Sven Giegold, the MEP in charge of preparing the deal on the SSM, welcomed the agreement and said that the European Parliament has obtained “strong control mechanisms, beyond what national parliaments usually have.”
For its part, the ECB is working on criteria for a comprehensive review of the banks’ balance sheets – a precondition for the central bank to agree taking on the SSM without jeopardising its reputation. Banks await the criteria to be published mid-October.