• Germany edition
 
Germany seeks to shape EU bank supervision
Photo: DPA

Germany seeks to shape EU bank supervision

Published: 12 Dec 2012 09:15 GMT+01:00
Updated: 12 Dec 2012 09:15 GMT+01:00

But recently, Berlin has appeared to signal a new willingness to compromise in order to rally other capitals such as Paris to its cause.

European Union finance ministers are scheduled to meet in Brussels Wednesday to try and agree a common line ahead of a summit of government leaders and heads of state the following day. Ministers failed to clinch an accord at a previous meeting last week.

"We're pulling out all the stops to draw up the legal framework for a banking supervisor before Christmas," German Finance Minister Wolfgang Schäuble told the Bild am Sonntag newspaper on Sunday.

That may come as something of a surprise given it was Berlin that has been putting on the brakes for months, insisting that quality was more important than speed when it comes to setting up such an authority. Under the proposals, the new European banking supervisor is to come under the umbrella of the European Central Bank.

But Germany has been suffering stomach ache over such a construction, arguing it could blur the line between monetary policy and banking supervision and lead to possible conflicts of interest.

Schäuble insisted that "Chinese walls" be set up and that banking supervision be assigned to a separate independent committee within the ECB and not the central bank's governing council which sets interest rates for the 17 countries which share the euro.

Weekly magazine Der Spiegel reported that, in a bid to woo support from

France, Schäuble even suggested that the committee be based in Paris, rather

than the ECB's home of Frankfurt.

The allocation of votes within the new banking supervisor is also a point of debate for Germany.

Bundesbank president Jens Weidmann argues that Germany, as the biggest contributor to the ECB's capital, should carry the most weight within the new authority.

Germany is also adamant that its large network of small savings banks should not come under the new supervisor's remit.

The new authority should focus instead on major European banks, while the smaller banks continue to be overseen by the national supervisory authorities, Berlin argues.

The German federation of savings banks, DSGV, insists it is not simply a matter of defending German interests, but also one of efficiency and priority. The ECB should focus on those banks where there are problems, such as the Spanish banks, DSGV argued.

But German Economy Minister Philipp Rösler seems to be ready to compromise on this, too.

Last week, he argued that although certain issues should remain the remit of the national authorities, the ECB "should theoretically have the power to intervene when and where necessary."´Thus, if there were a banking crisis in Germany, it could act there.

AFP/mry

The Local (news@thelocal.de)

Your comments about this article

10:06 December 12, 2012 by smart2012
the reason why Germany does not want to approve full supervision is cause the German local banking system is very bad..

this is the contradction of pushing for troikas, but not accepting supervision when u know u have a crap system
11:32 December 12, 2012 by raandy
The Germans are determined to keep monetary policy and banking supervision strictly separate within the ECB.As it is now each country supervises its own banking system.This type of supervision must go in a monetary union.The problem is if a few of these large banks run into trouble it not only affects the country of origin but the entire Union.The need for a central banking supervisory authority is a must,but the BIG question is who will control and hold the power of this powerful super organization.The road ahead will be about compromise if this is going to materialize.

Germany has the best approach in my opinion wanting a separate decision-making body consisting of independent banking regulators, in which each country's voting weight would be calculated according to its size and importance. This would help prevent weaker economies from dipping into German tax payer funds.
19:52 December 12, 2012 by Berlin fuer alles
A bit like a wolf supervising the flock of sheep.
11:50 December 13, 2012 by raandy
or berlin fuer alles, "The fox watching the chicken coop" -:)
Today's headlines
Expats reveal another side of Berlin Wall
Photo: Paul Sullivan

Expats reveal another side of Berlin Wall

Two expats who walked the Mauerweg - the 160-kilometre trail that runs the length of the former Berlin Wall - have written a book about forgotten aspects of its past and present. READ  

Karstadt closes six stores to stay afloat
Photo: DPA

Karstadt closes six stores to stay afloat

Germany's biggest department store chain Karstadt will close at least six stores, putting around 2,000 jobs at risk, in a drastic bid by its new boss to return it to profit. READ  

Quiz
How well do you know Germany?
Photos: DPA/Shutterstock

How well do you know Germany?

Do you know your Saxony facts from your Saxony-Anhalt ones? Test your knowledge of Germany's federal states in The Local's quiz. READ  

Climate chief hails Bonn greenhouse gas deal
Pollution from a coal-fired power station in Frimmersdorf, North Rhine-Westphalia. Photo: DPA

Climate chief hails Bonn greenhouse gas deal

The UN's climate chief hailed a European agreement in Bonn on greenhouse gases on Friday as providing "valuable momentum" for a world pact to be inked in Paris next year. READ  

Germany gets €780m EU rebate for poor growth
Photo: DPA

Germany gets €780m EU rebate for poor growth

Germany will get an early Christmas present of around €779 million from the EU, thanks to weaker than expected GDP growth. READ  

Stay inside after blast, Ludwigshafen told
Photo: DPA

Stay inside after blast, Ludwigshafen told

It will take several days to find out what caused a massive explosion on Thursday which rocked a town on the Rhine, killing a builder and injuring 26 others. READ  

German helicopter fleet 'not fit for Nato'
An NH90 helicopter. Photo: DPA

German helicopter fleet 'not fit for Nato'

Germany's fleet of NH90 helicopters is undergoing engineering checks after one of them suffered a serious engine failure, in the latest blow to the country's military capabilities. READ  

Ex-boss of Berlin Airport farce gets €1.2m
Rainer Schwarz at a court hearing in September into the case. Photo: DPA

Ex-boss of Berlin Airport farce gets €1.2m

The man who was blamed for Berlin's miserable attempt to build a new airport must be paid more than €1 million - after being fired. READ  

Steinmeier challenges UN over Isis gas reports
Foreign Minister Frank-Walter Steinmeier and Kurds watching the attack on Kobane. Photo: DPA

Steinmeier challenges UN over Isis gas reports

Foreign Minister Frank-Walter Steinmeier pressed UN General Secretary Ban Ki-Moon to bring possible poison gas use by Isis in Iraq before the Security Council. READ  

Spring back in German consumers' step?
Photo: DPA

Spring back in German consumers' step?

Update: Consumer confidence in Germany has stopped falling, as households appear to be no longer fazed by concerns about the economic fallout from geopolitical crises, a new poll found on Friday. READ  

RECEIVE OUR NEWSLETTER AND ALERTS
Photo: DPA
Politics
Satirist lives the dream on EU gravy train
Photo: DPA
Gallery
PHOTOS: Huge explosion rocks Ludwigshafen
Photo: DPA/Shutterstock
Gallery
Which high school cliche is your German city?
Photo: DPA
Gallery
Storm hits southern Germany
Sponsored Article
An international school unlike any other : School on the Rhine
Photo: Fitzpatrick family
Society
'We still don't know what happened to Matthew'
Photo: Mariana Schroeder
Munich
Special Report: Hope and chaos at Munich's refugee shelters
Photo: DPA
Culture
Can you top our history quiz leaderboard?
Photo: DPA/Shutterstock
Gallery
11 things Germans are afraid of...
Photo: DPA
Business & Money
JobTalk: All you need to know about working in Germany
National
Share news tips with The Local Germany
Sponsored Article
Bilingual education from nursery to graduation at Phorms
Latest news from The Local in Austria

More news from Austria at thelocal.at

Latest news from The Local in Switzerland

More news from Switzerland at thelocal.ch

Latest news from The Local in Denmark

More news from Denmark at thelocal.dk

Latest news from The Local in Spain

More news from Spain at thelocal.es

Latest news from The Local in France

More news from France at thelocal.fr

Latest news from The Local in Italy

More news from Italy at thelocal.it

Latest news from The Local in Norway

More news from Norway at thelocal.no

Latest news from The Local in Sweden

More news from Sweden at thelocal.se

3,527
jobs available
Toytown Germany
Germany's English-speaking crowd