ECB’s Draghi aims at having bank backstop mechanism by 2015
(Reuters) – A common resolution mechanism for dealing with troubled banks is a crucial part of the euro zone’s banking union and the European Central Bank wants it in place by 2015, ECB President Mario Draghi told Reuters on Wednesday.
Wary of a lopsided banking union that could see it supervise euro zone banks without a common backstop in place, the ECB has urged governments to agree on a strong single resolution mechanism (SRM) to salvage or wind down banks in trouble.
However, this second stage of the planned union is incomplete as politicians discuss how much of the costs should be shouldered by taxpayers. Plans for a third stage, a common deposit insurance scheme, have completely stalled.
“The ECB thinks that a resolution mechanism is a very important pillar of our banking union. We still aim at having it in place by 2015,” Draghi said in a Reuters television interview as the ECB embarked on its new supervision mission.
Setting out its plans to scrutinize 128 top euro zone lenders, the ECB earlier promised to put them through rigorous tests next year, staking its credibility on a review that aims to build confidence in the sector.
The ECB wants a tough review so that it does not face surprises once it has taken charge, and to avoid repeating the mistakes of two earlier European-wide stress tests that failed to spot risks that led to the Irish and Spanish banking crises.
“The ECB wants to have full responsibility for the assessment, but nothing to do with what has to be done following the assessment, namely the task of the resolution authority. The two things must be completely separated,” Draghi said.
Asked if the ECB would delay starting its new supervisory role if the SRM backstop is not in place when it is due to begin in November next year, Draghi said: “No, absolutely not.”
