Skip to comments.European ministers ink deal on bank oversight
Posted on 12/13/2012 5:11:51 AM PST by Olog-hai
The European Union on Thursday took a major step towards one of the most important transfers of financial authority away from national capitals when its member states agreed to create a single supervisor for their banks.
The political agreement reached at dawn by finance ministers augured well ahead of the evening start of a summit of the 27 government leaders seeking to set up a banking union.
Under the deal, banks with more than 30 billion ($39 billion) in assets or those that represent 20 percent of gross domestic product of their national economies will be placed under the direct oversight of the European Central Bank. The ECB can also decide to supervise any other bank it wants.
The deal gives the ECB broad powers, including the ability to grant and withdraw banking licenses, investigate institutions, and financially sanction banks that dont follow the rules.
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Here’s the logic. The ship is sinking, so all the rats go down into the hold and hold their breath. It will be like a virtual air bag to keep the ship from sinking.
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