Europe takes an important step towards a European banking union
Nicolas Véron 19 December 2012
European leaders pieced together an historic compromise last week on a European banking union. This column argues that the agreement, which centred on banking supervision, is only the first step on the long and winding road towards a banking union. But the fact that this step is now essentially confirmed is almost unqualified good news.
The political agreement reached early on 13-14 December by Europe’s finance ministers and heads of state and government makes it highly likely that legislation establishing a Single Supervisory Mechanism (SSM) with the ECB at its centre will be enacted in March 2013. This is a big European success, high up on what was the range of possible outcomes (Council of the European Union, 2012; European Council, 2012).
Key features of the agreement include:
European banking union, Single Supervisory Mechanism