FINANCIAL SERVICES : BANKING SUPERVISION: EBA'S ROLE TO BE NEGOTIATED ON 21 FEBRUARY.

The European Banking Authority's role in the future single supervisory mechanism (SSM) for the eurozone banking sector will be the focus of the three-way political meeting of the European Parliament and Council, on 21 February. The talks will exclusively concern revision of Regulation 1093/2010 establishing the EBA, one of the two texts of the package setting up the SSM proposed by the European Commission in September 2012.

So far, the parties have made greater progress on the second text in the package, namely the draft regulation granting supervisory powers to the European Central Bank (ECB), which requires unanimity by the 27 after consultation of the EP. Their progress has not yet led to any agreements on the more sensitive aspects, however. These concern the division of supervision tasks between the ECB and national authorities, as well as the rights and responsibilities of non-eurozone states that participate in the mechanism (see Europolitics 4573).

On revision of the regulation creating the EBA, however, which is subject to co-decision, "there's not the slightest shadow of an agreement," said an informed source.

The parties are therefore expected to pick up the pace, particularly as they still hope to wrap up the negotiations on the whole package during the first quarter of 2013.

GREATER POWERS

The Commission has proposed to amend the EBA regulation to take account of the creation of this new mechanism, and more specifically to safeguard the interests of the 27 (balance between eurozone members and non-members). The EU executive mainly proposes to change the voting procedure in the EBA.

The EP's insistence on giving the EBA greater powers in this context is one of the most controversial subjects on which the parties have to agree. The Council, which supports a minimal revision of the regulation, is particularly reluctant, Europolitics has reason to believe. It finds it preferable to await the revision of the three European supervisory institutions to be presented by the European Commission in 2014(1).

The Council seems gradually become more receptive but remains vehemently opposed to the introduction of two provisions that are important for the EP, said a source. These concern the collection of information by the EBA from national authorities and the EBA's right to intervene directly in member states to assess market developments (Articles 32 and 35 of the draft regulation).

These provisions aim to enhance the EBA's capacity to...