“BRUSSELS (Reuters) – Banks under the watch of the ECB that run into difficulty could be shut by a European agency, under a proposal that is set to rouse opposition in euro zone capitals.
European officials are seeking to design a scheme to close troubled banks to complement a contentious new system of supervision in the euro zone led by the European Central Bank.
The first leg of this banking union is due to be completed next year when the ECB takes on the supervision of banks. Now negotiations are under way to build the second leg – an agency to close banks with a central fund to cover the costs involved.
The European Commission is drafting the plan and, on Wednesday, commissioners from each of theEuropean Union’s 27 members met to discuss an early outline of the blueprint seen by Reuters.
In it, officials suggest giving the European Commission and a newly-created agency powers to close banks were the ECB to spot a problem and, in the words of one person close to the matter, “ring the bell”….”
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