BANKING SUPERVISION : COUNCIL AND EP ENTER INTO HEART OF MATTER.

The European Parliament and the Council are expected to enter into the heart of the matter on the package creating a single supervisory mechanism (SSM) for the banking sector at their political meetings, on 8-9 January (three-way talks).

The parties have to work out an agreement on a draft regulation that grants supervisory powers to the ECB, requiring unanimity by the 27 after consulting the EP, and on a proposal amending the regulation that establishes the European Banking Authority (subject to co-decision).

After an introductory meeting, on 18 December 2012, that did not address the substantive matters, the parties are now set to discuss their respective positions and zero in on the sensitive aspects.

The 27 finance ministers adopted their general approach on the SSM after more than 15 hours of negotiations, on 13 December, and they are not likely to be inclined to put their compromise back on the...