EU banking crisis: new agency to prevent future financial collapses - interview (The Voice of Russia)

Martin Vlachynský z INESS komentoval pre ruské rádio The Voice of Russia dňa 2.10.2013 bankovú úniu.

EU banking crisis: new agency to prevent future financial collapses - interview (The Voice of Russia)

Amid the necessity for the EU to create a new bank supervision system, Jorg Asmussen, a member of the executive board of the European Central Bank (ECB), has proposed to create a special agency to control 130 largest banks of the euro-zone. In an interview with Deutsche Welle, he said 85% of Euro-zone banks should be closely monitored, as the national governments are unable to handle bank backstops on their own. Martin Vlachynsky, analyst at the Institute of Economic and Social Studies, in an interview to Voice of Russia talked about the specific features this new structure would have and examined the purpose it would serve.

Mr Vlachynsky said that the new agency would be “a part of the upcoming bank union. “It is the first pillar of this union, the second pillar is the resolution mechanism and the third pillar is the insurance scheme. This banking union mechanism should prevent in the future bank collapses across the Europe.”

Assessing the efficiency of the new body, Mr Vlachynsky said that the problematic part of the scheme is “the resolution fund, which will call the good banks to pay for the mistakes of the bad banks.”

“Anyway this agency should be seen as a future prevention of financial crisis and the current crisis in European banking system cannot be influenced by this mechanism,” – Mr Vlachynsky concluded.

Discussing the possibility of the program’s possible implementation in the near future, Mr Vlachynsky said that the “mechanism is already on its way.” It received approval of the European parliament in September.

Mr Vlachovsky said that though there are still amendments to be made to the draft, in a year or two the system would start functioning. He also added that such supervision agency would help improving the European banking system as currently it is in need of a cure.

Evgeny Sukhoi

The Voice of Russia, 2.10.2013

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