Schaeuble in clash with the ECB on pooling of bank levies
GERMAN Finance Minister Wolfgang Schaeuble squared off with the European Central Bank (ECB) over the pace of pooling bank levies in a euro-area resolution fund, potentially slowing the proposal's progress into law.
ECB executive board member Benoit Coeure said last week that the proposed 10-year time for merging national contributions to the Single Resolution Fund "is too long and should be shortened, possibly to five years". A day later, ECB president Mario Draghi underscored this assessment.
Mr Schaeuble yesterday countered that halving the time allotted for moving to a "genuinely common" fund, as Mr Coeure put it, would entail forcing banks to pay into the fund in half the time as well, a point contested by some ministers and the European Parliament.
"It is clear that the mutualisation in this resolution fund proceeds at the pace at which the bank levy is paid in," Mr Schaeuble told reporters in Brussels.
EU countries are trying to reach an agreement with the European Parliament on a proposed euro-area bank-failure authority, the Single Resolution Mechanism, before the assembly adjourns for May elections.
The SRM, backed by a single fund, would accompany ECB bank oversight, which begins in November.
Under the draft plan, banks from the 18 euro countries pay into national compartments in the fund via a levy toward a target volume of €55bn.
Walls between the compartments are then gradually removed until, after the 10-year period, they disappear.
"Until everything has been fully paid in, we can't let member states escape their responsibility that the levy has to be paid in," Mr Schaeuble said.
Facing pressure from the ECB to accelerate the creation of a common fund, some EU finance ministers at a meeting in Brussels this week, including Finance Minister Michael Noonan, said contributions could be merged in five years, possibly before the fund is full.