"I think it is necessary and possible,” told Barnier to journalists, during an economic forum in Italy on Saturday.
“We are at the beginning of September, we are making this proposal very soon ... so that finance ministers and the European parliament can approve before the end of the year, for integrated supervision to be effective and operational at the beginning of next year”, he added, noting that the development of a common banking supervisor had already been underway since it was agreed to in principle by eurozone leaders at the last EU summit in June.
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According to leaked documents from Brussels obtained by The Telegraph, the ECB will also have the power to grant and withdraw banking licences, while conducting other monitoring activities, from spot-checks to staff interviews to on-site document and record inspections.
The Telegraph also claimed that the ECB will be empowered to “enter into administrative arrangements” with regulators outside the eurozone, or act and negotiate on behalf of all members in talks on global financial regulation.
Still, Barnier is likely to face opposition from Germany, which has previously advocated joint supervision for the eurozone’s 25 biggest banks only, and Britain, which had been staunchly against a bank union from the start. As a member of the EU but not of the eurozone though, Britain will be given the option to “opt-in” if it chooses.
The creation of a common banking supervisor was part of a deal that allowed the eurozone’s rescue funds to directly lend to stricken banks rather than having to pass aid through countries and adding to sovereign debt problems.