Progress in bank supervision at European Council
Government Communication Department
Press release 323/2012
The EU Heads of State or Government, meeting in Brussels on 18 and 19 October, agreed on further measures to establish a mechanism for bank supervision. The EU leaders assigned the Eurogroup finance ministers to draw up, by the year-end, operational criteria that will guide direct bank recapitalisations by the European Stability Mechanism (ESM). The ESM could have the possibility to recapitalize banks directly only after an effective single supervisory mechanism (SSM) is established.
The European Council emphasised the importance of equitable treatment of both euro and non-euro area Member States participating in the SSM. Finland considers it important that the single supervision mechanism be as attractive as possible to countries like Sweden and Denmark. Bank supervision is one of the tools that aim to strengthen the European Economic and Monetary Union.
"Progress in the banking union is crucial. The aim is to prevent such situations in which sovereigns become accountable for banks' problems. The banking union is not meant only for the euro area. In its establishment it is important to ensure that it attracts as many countries as possible to join", Prime Minister Katainen said.
"I am pleased that the conclusions also refer to the final report of the high level expert group chaired by Bank of Finland Governor Liikanen which discusses investor responsibility and the avoidance of banks' excessive risk-taking.
As part of the integrated budgetary framework, the European Council discussed the development of a fiscal capacity, a mechanism to support structural reforms in Member States.
"The discussion on the fiscal capacity has only started and the issue has to be carefully considered without any commitments at this point", Katainen said.
Prime Minister Katainen emphasised the need to foster the EU's unity.
"The development of the EMU is a vital part of the integration and crucial to the strengthening of the euro area in the long term. In this situation, we need to ensure the EU's unity and a strong union", Prime Minister Katainen said.
The orientations agreed on at the European Council make part of the efforts to develop the European Economic and Monetary Union on the basis of the interim report presented by President of the European Council Herman Van Rompuy. A specific road map for further development is to be agreed on at the European Council meeting in December.
Inquiries: Pasi Rajala, Special Adviser, EU Affairs, tel. +358 9 1602 2055 or +358 400 505 269 and Kare Halonen, State Secretary, EU Affairs, tel. +358 9 1602 2180, Prime Minister’s Office