EU plans powerful new banking watchdog -draft

September 10, 2009

eu-flag   BRUSSELS, Sept 10 (Reuters) – The European Union plans to create a banking super-watchdog and give it power to overrule countries such as Britain, according to draft legislation that could come into effect next year.
   In the documents seen by Reuters, European officials also gave the blueprint for a pan-European supervisor that would warn of early signs of a crisis like the current one, which wrecked financial markets and froze lending around the globe.
   The proposed laws, which also include the creation of a separate supervisor insurers, are set to give more say than ever to European institutions as Brussels tightens its grip on an industry blamed by many for triggering the economic slump.
   The draft laws, which is the result of an agreement thrashed out by EU leaders earlier this year, also threaten to erode the authority of Britain, which is fighting to keep control over the centrepiece of its economy, the City of London.
   The new European watchdog is given the power to order national supervisors to take specific action, in the draft. It leaves it up to the European Commission or EU executive to decide when they should be allowed overrule the local watchdog.
   The draft law also allows the banking super-watchdog to intervene with individual banks if, for example, the local supervisor does nothing, EU officials wrote in the document.
   Supervision is central to a raft of legislation Brussels drafted in the midst of the financial crisis that spans limiting banker bonuses to forcing lenders to make greater financial provision for a rainy day. (Reporting by Ilona Wissenbach; writing by John O’Donnell; editing by Karen Foster) ((; +49 1726 785 830))
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 Thursday, 10 September 2009 15:13:27RTRS [nLA95460] {EN}ENDS

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