French Fin Min : France, Germany Want to Bridge Differences on Banking Union
09/15/2012| 08:05am US/Eastern
NICOSIA--French Finance Minister Pierre Moscovici Saturday played down differences with Germany on the first steps leading to an ambitious project for a continent-wide banking union, as he said that a compromise on outstanding issues must be reached by the end of the year.
"There's no opposition between us," Mr. Moscovici told reporters after the meeting of European Union finance ministers. "A compromise looks within reach, and the Dec. 31 deadline seems totally reasonable to build it."
Still, as finance ministers aired their views on the new framework of banking supervision and regulation being set up in the EU, differences have emerged on which banks should be subjected to the body, as well as on timing.
France wants the supervisor to be responsible for all banks, Mr. Moscovici said, stressing that he doesn't believe the distinction between systemic and non-systemic institutions. Germany, on the other hand, sounds reluctant to cede total control of its banking sector, which includes the Landesbanken--small, public-sector banks strongly tied to local governments.
"Local and specialized banks create more problems to the financing of the economy than more global banks," Mr. Moscovici said. "All banks must be supervised."
While German Finance Minister Wolfgang Shaeuble said Friday on his way into the meeting that he didn't see how it could be possible to have a direct recapitalization of banks from the European Stability Mechanism by January 1, Mr. Moscovici repeated that acting fast was key.
"Some of our partners think we should proceed more slowly," he said. "Still, I think we should be ambitious. Let us not waste time."
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