ECB Will Gain New Oversight Powers in November

The European Central Bank will attain significant powers over the euro zone’s commercial banks once it becomes their supervisor later this year, including withdrawing bank licences and assessing acquisitions, it said on Friday.

From November, the ECB will supervise directly around 130 of the bloc’s largest lenders as part of a broader push towards closer integration of Europe’s banks that aims to create a more level regional playing field for the sector.

The region’s other 5,900 or so banks will remain under the brief of national supervisors, though the ECB will have powers to intervene if it deems necessary.

“(The ECB) will be exclusively competent to grant and withdraw authorizations for credit institutions and to assess acquisitions of qualifying holdings in all credit institutions,” it said in a draft document that laid out how the ECB and national supervisors will cooperate under the new Single Supervisory Mechanism (SSM).

The ECB is running an in-depth review of the euro zone’s 128 largest banks to check whether they have set aside sufficient capital to handle the risks on their books.

via Reuters

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