Saturday 23 September 2017

Marc Jones: It looks like a great idea on paper, but there is no quick fix for Europe’s banks

THE euro zone's plan to let the European Central Bank supervise its biggest banks requires governments to give it unambiguous powers, sets a highly ambitious timetable and poses potentially dangerous conflicts of interest.

On paper, the idea of creating an uber-watchdog with knowledge about the risks in banks' balance sheets and information on how much they depend on central bank funding, appears a perfect recipe for an effective supervisor.

The European Commission is expected to lay out the blueprint in September, giving lawmakers time to discuss changes ahead of an end of year deadline, which must be met before the euro zone's bailout fund can start recapitalising banks direct.

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