Tags: EU | Europe | Financial | Crisis

EU Nations Pressed to Fix Financial Oversight

Tuesday, 13 Jul 2010 08:14 AM

 

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European Union governments said Tuesday that they are close to a deal to set up new financial oversight agencies at the end of the year.

The deal would have to be a compromise between governments and the European Parliament, which wants to give the new agencies more power to overrule national supervisors. The Parliament has delayed a key vote on the new oversight structure until the fall.

Belgian Finance Minister Didier Reynders — whose country currently holds the EU's rotating presidency — said he aimed to strike a deal with the assembly this month, which could allow a parliament vote in September.

German Finance Minister Wolfgang Schaeuble said he was confident that "even if we don't reach a deal with the parliament today, then in the summer so that we have financial oversight on Jan. 1, which is the goal."

Finance ministers are also discussing details of banking stress tests due to be published on July 23 that they hope will assure markets that the region can cope with more shocks to the economy.

EU Economy Commissioner Olli Rehn called on governments to ready financial help for any banks if the simulations show that they would run into trouble if economic growth drops, financial conditions tighten and borrowing costs soar.

Governments were more upbeat. Austria's Proell said he thought the tests "will show that the European banking industry is robust and can withstand future crises."

It is unclear how much detail banking supervisors will make public on the 91 banks they are testing. They have never published the results of individual banks in earlier tests, giving only a general thumbs up for the entire banking sector.

EU finance ministers also formally criticized Bulgaria, Denmark, Cyprus and Finland for running deficits above the bloc's 3 percent deficit limit and told Bulgaria and Finland to reduce the budget gap by 2011. Cyprus has a 2012 deadline and Denmark has until 2013.

© Copyright 2014 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

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