Deal on new European supervision mechanism for a safer and more democratic banking system


Negotiators from the European Parliament and EU Council struck a political deal today to set up a Single Supervisory Mechanism (SSM) to oversee European banks.
S&D Euro MPs welcomed the agreement as "a first crucial step towards a fully fledged banking union".
Said S&D Group leader Hannes Swoboda:
"The case of Cyprus reminds us that the banking system in Europe is vulnerable and still very fragile. The creation of a Single Supervisory Mechanism is a major step forward towards a banking union. But we need to do much more. 
"It is not acceptable that some governments are tempted to raid the savings of their citizens to save banks. Banks should be entirely responsible for their actions.
"We urge the Commission to speed up work on a European resolution mechanism to deal with future bank failures in order to complete what has been achieved today. This resolution system should be financed by the banks themselves.
"We are also eager to work on ring-fencing the most speculative banking activities to separate them from retail banking, based on the recommendations in the report by Finnish central bank governor Erkki Liikanen."
Said S&D Group co-negotiator Antolín Sánchez Presedo (Spain):
"The Single Supervisory Mechanism is a first and vital step towards a fully fledged banking union and breaking the vicious circle between private and sovereign debt.
"It is important that accountability and democratic scrutiny are preserved when transferring responsibilities from the national to the European level, and the role of the European Parliament is strengthened."
Said S&D co-negotiator Gianni Pittella (Italy):
"This regulation is a turning point for banking regulation. We are creating a truly European supervision system with the European Central Bank (ECB) in charge.
"The ECB is the only body competent to supervise all European banks. It has the ability to take over from any bank at any given moment.
"For the first time since the establishment of the ECB we are dramatically strengthening its transparency and accountability. The European Parliament will be able to approve the appointment of the heads of supervision and will have greater access to documents.
"Stricter rules on conflict of interest are also included in this regulation. The S&D Group has achieved a significant victory in the trilogue discussions."


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